Breaking TOR

I recently read an article about the NSA trying to break TOR. They seem to have a lot of problem with this. If you really wanted to look at all the TOR traffic in your country as a government, this should be possible. You should be able to do this with a type of MITM attack. You could advertise all the TOR relay agents IPs inside your ISPs to point at your own Servers. You could either try to setup 3500 TOR relay agents or a more practical way would be to get one server to act as a Relay server for all. Either way you should be able to read the transmission both ways unencrypted without problem if people don’t use pre shared keys. Any thoughts?