That's not how bitcoin works.
If you control 51% of the mining network (not a trivial feat, as you seem to think it is), the best you can do is either:
a) reverse your own otherwise valid tranactions (presumably the government doesn't care about defrauding its citizens -- it can do that without resorting to bitcoin hacks), or
b) slightly slow the effective transaction acceptance rate by only accepting your own (garbage but legitimate-looking) transactions. This would have to be done in some inconspicuous way such that the client authors can't reliably filter out your transaction spam with a clustering algorithm, or else a client update that rejects your spammy block chains would completely nullify the attack.
I don't see how either would "kill" bitcoin, or even have much of an impact.
Unfortunately it seems I was wrong. User mrb gives useful information in this post (https://news.ycombinator.com/item?id=5330343), linking to (http://blog.zorinaq.com/?e=14)
Someone somewhere linked to a bitcoin information page showing how much computing power is in the blockchain, and it's an amazing amount. More than all the top500 combined. (But remembering that we're comparing non-similar computing units.)
It's how the US is able to attack Iran's currency from the outside so easily and spike their inflation to the moon.
It's how when the crash occurred, the Fed was able to stabilize the global banking system by shooting hundreds of billions around the planet to international banks (from Berlin to Tokyo).
It's how the US was able to pressure the world's second largest - and fastest growing - economy (China) into floating its currency more freely and 'allowing' its value to climb.
It's how the US was able to dictate terms to the Swiss (of all people, given their history).
The fact that it's international will just make the Feds more frantic about either controlling it / replacing it / destroying it. The solvency of the US Government depends on the FRN standard, and the ability to 'print' at least $15 trillion dollars over the next 15 years. You don't think they'll attempt to kill anything that even remotely threatens that?
And to be clear, what's likely isn't that digital monetary systems will disappear, rather, that bitcoin will be usurped by official standards. The US will merely get the G30 to agree to some common frameworks and regulations, that will stuff the dollar / euro / yen / yuan into a new shiny digital box. The G30 will jump on board with glee, as they all want to control their own currency systems as much as the US does.
Should it? Where would they take that kind of computing power from? 700 petaflops? The top supercomputer in the world does 20 petaflops, for comparsion.
In a post-CPU, post-GPU, ASIC dominated world, what rational bitminers (other than botnets) would compete against the NSA, or any malicious attacker, who was willing to mine unprofitably? Say even below the cost of electricity, with hardware and bandwidth costs of zero.
If NSA will sell their coins, they are now a part of bitcoin economy.
But even if they don't do this, and they become part of the economy - it's easy for them to create havoc by flooding the market and devaluing bitcoin, then buying all the cheap bitcoin, then flooding the market again. Do that a few times and they'll have removed anyone but gamblers from the bitcoin economy.
Valid nodes will never accept invalid blocks, period.
They could clearly hit it both ways as well. Come up with their own standard, regulate bitcoin practically out of existence, and simultaneously attack in a malicious manner.
One thing is certain, the US Government didn't really care whether AltaVista, Lycos, Excite, Google, Yahoo or MSN came out on top in the search wars (competing technology), but they are going to intensely care about who wins the digital monetary system competition that has just begun. We have more money, banking and finance laws on the books than any other sort, because of their desire to control money (which controls everything else).