Most of the mining is now done in large data centres packed with ASIC miners. Ban it, seize the equipment and the government can immediately begin a 51% attack. Shut down the exchanges leaving only peer to peer exchanges, but now your local exchanger has the legal status of a drug dealer and all the sketchyness that comes with it.

No doubt there will be protocol changes to blacklist the government miners, a cat and mouse game will ensure. Bitcoin will survive, but it will be a tiny fraction of its previous size.