Bitcoin is new technology. It's a thing that exists now. Making it illegal will simply push it to countries where it's not illegal. History shows that's an excellent way for countries to become less relevant. It's like making alcohol illegal.

The way to beat bitcoin, if you're a state, is to control it. For example the US government confiscated from DPR something like 7% of all BTC that will ever exist. China's mining facilities happen to control a large portion of the network's hashing power. The NSA has undoubtedly studied ways to DDoS the network. Etc.