The attack scenario you came up with it incredibly expensive, and then uses that expensive hardware in the most ineffectual way possible.  With all the time, cost and complexity, if the hashrate fell 99% tomorrow, there would be a consensus of support to hard fork the network and adjust the difficulty.  It would take a couple lines of code.  

If an attacker has 99% of the critical resource, there are far more serious attacks possible.  For starters the attacker could mine a never ending chain of empty blocks and prevent any transactions from ever being confirmed again (or at least as long as the attacker is willing to continue).  The reality is that a nation state could kill Bitcoin and probably will be able to for the conceivable future.  Of course we all know the fact that napster was taken down resulted in the world wide abolishment of p2p file sharing as well.   If the US government spent billions to take down Bitcoin, well I can't imagine a more bullish scenario for crypto currency.