Why do you say they will dictate the terms? They will own the mining? The whole point of bitcoin is decentralization (unless some large entity owns mining majority).
Without control of the nodes, the mining hashpower is only a secondary concern. If the miners ever tried to enforce their will, the nodes would simply change the PoW algorithm, and the miners would effectively be out of work.
- People live in countries
- countries levy taxes to be paid in "real money"
- banks deal with the "real money"
- BTC exchanges have to work with these banks + gov't
At the end of the day, you need to pay your taxes - presumably in your national currency.
Suppose you had a commerce that only accepted bitcoins. How will you pay your taxes ?
If the public does not want national currencies, then governments need to make them wanted. Physical force is an obvious approach, but probably impractical.