1) We're dealing with people's money. Do you realise that the banks hold people's funds? At any time if the government doesn't like us, they can make one phone call and pull the plug.
2) Governments will eventually take a look at Bitcoin. If there is a good precedent, they are far more likely to make a positive ruling on Bitcoin than ban it. An honest, long-running, regulation abiding exchange sets a good example and allows us to take part in policy making decision rather than 60 year old guys in suits.
3) Mainstream people like legal legitimate things. If you want Bitcoin adopted, we have to cater to them.
Is it your goal that Bitcoin become the sole preserve of money launderers and drug dealers, forever shunned from mainstream acceptance? Bitcoin has an immense power to positively transform the world and perform an amazing social good. If Bitcoin is made illegal, then all that good would disappear and only the shady things will continue... perhaps even proliferate.
Also, we pay the cost for abiding by regulation, not you. Why would you be against something which ensures we're an honest operation? Something like mtgox would never have happened if they were properly abiding to regulations. People have lost a ton of money. Many laws suck hard. But why would you be against something that at least protects the consumer. Especially if we abide by it willingly.
This is all about protecting Bitcoin. Why else are we pulling 14 hour days for months working around the clock... We interface with the financial system, and we want to play on their turf. They set the rules.
We're the only exchange AFAIK that has opensourced our code, and contributes back software we write to the community. We don't only develop exchanges, but write other software too which is released for free. We use project funds to hire more community members to keep doing cool Bitcoin projects. I'm sorry that everything isn't perfect, but in the real world you have to make strategic compromises to allow things to move forwards for the benefit of all.
1) No, the government can't just 'pull the plug'. If it could it would have done so already. Even if they shut down every server, which they can't because they're spread across the globe), people would buy bitcoins locally for cash or use Tor and buy them off sites like Silk Road.
2)Horrible argument. Libertarians like Wayne Root have used this "let's behave to get a seat at the table' argument and its pure BS. I'm a little insulted you even trotted it out. I have no desire to sit at their table and help with 'policy' for bitcoin, even if I was galactically stupid enough to believe they would EVER do such a thing. What you said is a giant statist lie to fool the peasants into thinking they have a say - we don't and won't till we have our own currency - not one regulated by the government.
3) Mainstream people are irrelevant. Mainstream people are generally the parasites I personally am trying to detach from. The last thing I want to do is cater to parasites. Most of the mainstream isn't even aware of the problems in the monetary system, so why are you worried about what they think? If bitcoin succeeds and creates a truly free market economy, they will NO CHOICE but to join in or be beggars...or die off.
Your argument for mainstream acceptance is one of someone who has little confidence in principle, and more in winning a popularity contest. As currencies go, bitcoin wasn't designed for the purpose of being regulated. Nor was it designed to appeal to mainstream sheeple. It was designed to be a pure free market currency that is immune to such nonsense, and only sensitive to the real invisible hand determined by the consumers' demand.
You want to destroy its main benefit, and roll back the clock to the same monetary problems we already have, and you will fail.