One of the ways in which government will make it hard for holders of bitcoins that I have not yet seen mentioned here is that it will make it so that holders have no recourse to the courts when they are robbed or defrauded of their bitcoins.
That is certainly a way that that governments can make the use of Bitcoin less convenient, but I don't think it would be a show-stopper in and of itself, first due to the existence, already, of escrow services, and secondly because the practical difficulties of prosecution for all but very large sums doesn't prevent international transactions right now with conventional currency.
Tangential, but a subject of some local interest:
Why Bitcoin will fail by Avery Pennarun. "The sky isn't red." Thesis:
I'm not sure I buy these and am not competent to evaluate his claims on 3., but would like others' critique.
L019: Bitcoin P2P Currency: The Most Dangerous Project We've Ever Seen by Jason Calacanis. A rather more enthusiastic viewpoint of the project:
The actual text contains many more caveats than the eye-catching selection of points above.