Just like the rest of the cyberlibertarian blue-skying that went on back in the '90s, it was a nice dream, seriously! But in reality it turns out that governments can just send some armed men around to beat up the people with the encrypted faxes, email, and digital cash, and that'll largely put an end to it. The extent to which a government is helpless to stop that behavior is purely the extent to which it is reluctant to send, or incapable of sending, the armed men.