I'm a firm believer that there are better avenues than regulation-at-gunpoint, and cryptocurrencies are looking like a big part of that, but the community needs to prove this.
Of course, the point is not doing it too early to avoid chocking the potential of bitcoin, but eventually, as bitcoin grows, after the power has shifted from the original believer to greed-driven finance professional, you will need regulation to rein them in.
Of course, we can dream that communities will be strong enough. But let's be realistic - financial world has the money and it is their job to play with it, it would make no sense for them to ignore something as important as bitcoin is becoming.
Unless you have unyielding cryptographic primitives to help.
I'm at the Austin Bitcoin conference right now listening to a talk about Open Transactions and cryptographic exchange auditing. It sounds like exchange theft is pretty much a solved problem. Using crypto, we now have ways to make theft or coin loss pretty much a problem of the past, because we can make operating a fractional reserve exchange impossible and make stealing coins very, very hard. It seems like cryptographic regulation is drastically more effective than government regulation.