I think that governments need to regulate Bitcoin eventually for the mass adoption. In the end, regulation means becoming officially legal to use it under some conditions. But the regulations shouldn't be too strict. Otherwise, Bitcoin users won't be happy about it and Bitcoin can lose its meaning.
Bitcoin shouldn't be regulated not even a bit because it will kill the concept of bitcoin's existence and even if government starts to implement regulations mildly, it won't take long to fully regulate Bitcoin and make it like any other centralized wallet payment system. They have been trying to regulate Bitcoin unsuccessfully from long time. Regardless legal or illegal users will figure out a way to use Bitcoin if they want to use it so we shouldn't be compromising on basic rules of bitcoin to make it legal.