I don't see it as a blow to bitcoin (although i see why it may have an effect on the market value). I think it will encourage growth of alternative services that will eventually strengthen the market place. This is a learning event. Things like this let others see the opportunities that exist to provide better services. Just this morning I have gotten quite interested in Ripple and Buttercoin (only a day old!) and their potential.
I also wonder about the trust issues that are obvious and what place there might be for voluntary regulation / certification. Who wants to set up a regulatory authority in the spirit of
http://www.fca.org.uk/