Your post makes many assumptions. One - existence of trustless bridges from PoW chain to Ethereum (trustful bridges are rather easy to kill). Second, regulation can be achieved in a way OFAC does it - "anyone who holds/buys this token is a felon". This drives money away from the chain, reducing its PoW budget.

And I really suspect that Ethereum will win the race anyway. At least until something really juicy appears (like private contracts, chain-managed secrets, etc).