As for gold versus paper money, the above reasoning does not apply. Paper money is accepted for tax purposes (and would be far less popular if it was not).
And if you stick to Bitcoin transactions only, it would be very easy for authorities to declare tax-evasion, for starters, which opens up a whole different can of worms, as transactions are occurring in a non-regulated space.
On the whole, it seems like Bitcoin-enthusiasts would be far safer in a more regulated environment.
Now, you can still get around it if you are small enough, but it is the same with nearly anything else.
Yes, regulations and laws are applied at the entry and exit points of the money system, and people who try to avoid those regulations run the risk of being arrested.
Speaking as a longtime Bitcoin user, I'd disagree. My bitcoins were easier to trade before the government started taking Bitcoin seriously. They were also safer before the government declared the power to confiscate bitcoins.