Even if BitCoin can't be exchanged for some fiat currencies, there is always the prospect of exchange through some middle step: either less restrictive foreign currencies, or commodities such as gold.

At this point, a full-scale governmental assault on BitCoin could slow it down or scare some people away, but it's highly doubtful that the growth could be stopped altogether. The bigger danger is that they'll embrace it wholesale and start taxing BTC exorbitantly instead. :P