You can't regulate it because it's anonymous and doesn't exist in any one place.
When you pay someone with bitcoin, there is no way to trace the transaction to the recipient.
The very reason the government will regulate it "for the children" (stop kiddie porn sales), "fight the War on Terror," and "fight the War on Drugs."
The feds have been telegraphing this for the past year. Silk Road is the poster child for why it will be regulated.
Bitcoin miners will be heavily regulated, Converting bitcoins to U.S. fiat currency will be heavily regulated or illegal. If regulated, the I.R.S. will be used as the weapon to hit people with tax evasion charges for nonreporting of bitcoins as income.
It's a matter of when, not if.