That's assuming PoW cryptos would remain attractive to smaller operations and hobbyists. I'm not sure that's a given. If no business can change your coins to fiat, and no business could accept your coins in the first place (not that they really do now, but whatever), your options for getting anything out of your coins is... what? Posting on craigslist to find people to meet up for illicit localcoin transactions?

And if you can't really do anything with your coins but have your coins, why would people rush out to break the law to mine them?