Your bitcoins can be confiscated, government can seize all your property for <reason they will come up with when they want to>. If you no longer have your private key, good bye wallet.
The good news is that it doesn't scale.
I feel like this is a strawman argument here, you think your buried gold, bank accounts or any other number of things going to hold up against that?
For an ordinary person, investing in real estate is a simple example that meets this test - you can beat me up with a wrench and force me to do stuff, but I'll be able to recover (most of) it afterwards. For the common person, irrevocable transactions bring little benefit but a lot of risk, it's a drawback not a feature.
Yes, that's not resistant against the government - but again, a normal person is a lot more likely to encounter criminals trying to "confiscate" everything they own rather than government doing the same. Sure, there are edge cases (e.g. fraudsters stashing their gains, deadbeat dads refusing to support their kids, etc, etc) but for a normal person worrying about government seizure is much less relevant than, for example, ensuring that you don't lose your BTC in a house fire that burns all your stuff. Would your fire insurance cover that?