Agree completely, in fact i've just added this link: http://risky.biz/haroon (Lulzsec, Ranum and I Told You So!)
If this government wants to survive this coming era, it will not do what's feared. If it does do the sort of crackdowns people are fearing, it will not survive. Either it will be broken outright by the hackers and those who still care about freedom or it will fair to accomplish security and be broken by the people that still aren't safe.
The best chance is to actually address the issues by developing better technology in dialogue with the hackers and the security minded. This may make the short term harder but it will set the foundation for a superior nation built on something that can actually be defended.