Secondly, what makes it much easier to evade taxes by failing to report Bitcoin payments than evade taxes by failing to report cash or check payments?
Really? OK, I will assume you're serious and not joking. A check is drawn on a bank or savings and loan or such, and banks, etc, are heavily regulated and audited by government.
As for cash, the U.S. government makes it inconvenient to pay someone or be paid by someone in cash with "Know Your Customer" banking regulations. They try to make it so that the inconvenience and risk increases at least linearly with the amount of cash involved.
Copyright infringement and gambling do not have the potential to seriously reduce governmental revenue. Consequently, the most competent bureaucrats have not been assigned to controlling those things like they have or will be assigned to controlling Bitcoin.
The U.S. response to infringement has been conducted mostly by the legislature and the judical branch. It would be a lot more effective if the most competent parts of the executive branch, e.g., the Secret Service and the Treasury Department, made it a priority.
Disclaimer: I haven't studied Bitcoin so these comments should be taken as my rationale for not making the effort to study it.
They try to make it so that the inconvenience and risk increases at least linearly with the amount of cash involved.
Linearly? You don't have to go up all that far on a linear scale before you reach 100% chance that you will be caught and receive the maximum punishment allowed by law!
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.