I disagree that's an accurate way of stating it. IRS isn't lawless, and unlike Google it doesn't unilaterally write its own laws. It's got significant internal controls that prevent it from lawlessly "seize[ing] assets, garnish[ing] wages, place[ing] liens, etc" without relying on necessary cooperation from non-government actors to keep it in check. The US Government as a whole is also inhibited from much lawlessness through deliberately designed checks and balances and other mechanisms, mechanisms that are largely absent in private corporations like Google. Then there are elections, which provide some measure of accountability to the general population; rather than a smaller, self-interested set of shareholders as is the case with Google.
All these mechanisms aren't perfect, but their importance needs to be understood and recognized.
Google/FB have to ... well, nothing. I have the same say with them as I would with a video game company and in-game gold. They could decide I simply don't exist. Ticket closed. Block chain (from the implementations I have seen) does not solve this.
> I have never seen an argument against crypto currency that doesn't already apply to the current systems, we just pretend its not the same.
This is wrong. While they are imperfect, the US government has a much better developed body of law and practice to protect citizens from its actions than Google does. Citizens have much more leverage over what laws are written than they have over the terms in Google's TOS.
Google reserves the right to unilaterally terminate its relationship with for you for any reason with little to no ability to appeal, and regularly exercises that right. When it does that, you lose access to all accounts and all data you've stored with them. If the government were like that, it'd regularly be revoking people's citizenships and confiscating all of their property without even giving a reason, let alone a trial. The US government doesn't do that, and if it did it would be illegal.
In my view, cryptocurrency is in fact more primitive and less advanced than government currency in all but a few narrow, technical senses. There's a huge amount of valuable social technology that most cryptocurrencies just threw away for ideological reasons.