Wouldn't large intrusive governments actually prefer Bitcoins in some ways to things like Dollars? With Bitcoin, they could monitor every single transaction and every account. They could use their powers and resources to determine owners of many accounts, and easily create graphs of who each person trades with and how they spend their money.

Bitcoin is a great thing, but the "crypto" in its cryptocurrency is about trust, and not about privacy. Bitcoin has a very open ledger, and while sometimes governments will cause trouble, won't they also see the huge advantages that Bitcoin offers them with its providing a very easy way to monitor all of the usage?