This is basically where I see Bitcoin going. The coin itself will be (more or less) irrelevant, but the technology (or something like it) will play center stage. The U.S. government isn't concerned about Bitcoin as a threat to the dollar. The IRS has already made it impossible to use as a traditional currency without running afoul of tax code. Report capital gains on every transaction? Yeah right. They knew exactly what they were doing .. marginalizing Bitcoin. Digital currency has been here ever since banks established electronic lines of intrabank credit. This technology will likely be adopted in some form by governments, with their own strings attached (100% oversight). People will go along with it. Middle/upper class Americans simply don't have the stomach for dissent. They've too much to lose. Credit cards work fine for now, and when the time comes, a shift will be made to something a bit more streamlined, all the big players will be right there at the trough, make no mistake.
The tax code is a such a serious barrier to adoption now. Remember the FEDs finally brought down the mob not by convicting on actual crimes, but convicting on tax evasion. The Bitcoin tax rules will be so hard to follow it will function as a trap for most people.
If the TV says Bitcoin is for terrorists but both my friends & neighbors use it and have doubled their wealth in the span of a year then I might just consider it.
Greed
We are 100% in agreement on the greed factor, but what if the scenario plays out as:
"The TV says Bitcoin is for terrorists and both my friends & neighbors were dragged into court over tax evasion, one got off but lost his house and the other went to jail." Would kinda dampen the greed factor.