Just to make sure it's clear, I'm not saying that courts should have any special power to manipulate the blockchain, just that they could declare a stolen title invalid, and issue a new one in the form of a new colored coin on the blockchain.

I'm not claiming any benefit related to government control, just that escrow would be unnecessary.

At which point the blockchain is not needed.

A centralized source will be held accountable to the legal demands, thus as trustworthy as the blockchain yet significantly more beneficial for all users in terms of speed, storage and utility.