I think that if this is true, it'll ultimately be a good thing for Bitcoin -- increase awareness, incentive more miners around the world, etc. The crash would hurt, but it would be temporary -- digital scarcity is here to stay, and network effects matter. This isn't my ideal scenario for spreading awareness, I hate to see anyone lose money, but it's better than central banks continuing to dominate the worlds' monetary systems for the rest of eternity (which isn't going to happen!)
Indeed. Busts help shake out weak players and snake oil salesmen. Bad companies go belly up, releasing proven employees and resources. Government and business coexist in an ecosystem, a balance is necessary between the two or one grows too powerful, choking the ecosystem. Booms and busts are natural weather cycles. Busts are like a hard winter, they weed out the entities without the necessary fitness to survive.