1. Hopefully the words "Monetary Policy" and "Fiscal Policy" ring a bell. The ability to control market fluctuations, let alone wield some level of political power as a government, lies heavily within a government's ability to utilize its money supply. Not all regulation/rule is evil - what would a programming language be without regulation/rules? Additionally, the great depression was more than proof at the need for some level of market regulation (John Keynes).
2. Basing money on a fixed supply, IE FUCKING ENERGY (since it can't be created or destroyed), would imply that there is a fixed amount of wealth. That's called Mercantilism and it was disbanded by Adam Smith... and 1000s of other economists/governments/times/etc
3. Bitcoin and friends decrease the transaction costs of money exchange (government regulation, forex, taxes). Money creates liquidity for the value you've created, and Bitcoin and friends makes that value more liquid -in certain ways- but it does not replace money.
4. Stability. Knowing that there is an entity that will back their currency, filled with fail safes, etc. encourages proliferation of that currency. It's why most investments (forex wies) are done in US dollars. Thing such as bitcoin, do not have that type of security. (FDIC anyone?)
5. Decentralization of currency often leads to destabilization of currency. If anyone can make it (and yes, it is far more likely someone will create a bitcoin instead of forging a US dollar), then the value in and of itself will drop.
6. "But WallStreet and all the finance people are up in a yipyap about it!" That's because it's an investment - many people play the forex (foreign exchange market) because there is much profit to be made from arbitrating currencies.
7. Inflation is needed - Milton Friedman has this at about 4% or so a year to keep up (check on that). Why? Try playing monopoly with 4 players with the set of cash they give you. Then try it with 10. There's not enough money to represent the players, therefore you need more. Inflation isn't always bad.