The US Government now oversees all possible entry points into Bitcoin from US Dollars, even localbitcoins / peer to peer sales over $300.  (see: florida bitcoin sting).  They now legally have access to the identity of everyone who purchases over $300 worth of Bitcoin with US Dollars.

The US Government also now requires you to report every Bitcoin transaction as a capital gain or loss.

So every time I spend bitcoin, I need to:

1) Keep track of how much fiat I used to buy the bitcoins originally
2) How much the item costs in fiat
3) Figure out when I bought what bitcoins and when
4) Calculate the capital gain based on the difference between the item and the purchase price of the coins
5) Repeat steps 1-4 every time I spend Bitcoin
6) Calculate my total gained / lost from every transaction at the end of the year.  
7) Report this amount on my tax form, including proof of every transaction in the event of an audit 

If this procedure is not followed, you are subject to being locked in a cage.  

So to buy a $2 coffee, I need to expend more effort than the coffee is worth.

Where is the outrage?  What many have feared is currently taking place, and it's like nobody gives a damn.  They are stopping Bitcoin in its tracks before there are enough people outraged by it to create any backlash.

Let this be noted by everyone calling for "more regulation", and to "ignore the libertarians".  We are losing.  Badly.