I don't believe governments will become obsolete under a bitcoin standard, but I think they will become smaller and more accountable to their citizens. I believe there will always be some form of governance in human society. If there was a magic button that you can press to dissolve all governments overnight, people will begin to organize and form new ways of governance the very next day; and with governance comes governments. But under a bitcoin standard, governments will compete with one another to attract talent and capital. People will be able to leave a jurisdiction with their wealth if they are being mistreated by the government. Governments will be accountable for their actions because they no longer control the money, and thus, losing the ability to socialize mal-investment losses, extravagant/meaningless spending, or steal from the people through inflation.
I believe what you said makes a lot of sense .... BTC wont make govts obsolete ... its just some of us are married to their own ideas and they deeply WANT to see something happen.
Ideas like communism, anarchism etc... may sound appealing on paper but never achieved any level of meaningful success because they are deeply flawed but yet they survive and get traction :)
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