re: So what happens to Bitcoin now?

If DPR was identified from steps to set up Silk Road, then it stands to reason that the feds were on to him for some time since they had access to this information since the inception of Silk Road. As such the feds identified him solely due to his incompetence, but they still had to assemble their case and show how he profited from the illegal activity. How did they track his, or anyone else's, transactions on the Silk Road? The feds had to find out where he entered and exited the Tor network. Once they had that it was game over. And now the feds can use all of his interactions with other Silk Road users to trace them to their entry and exit points. Traffic analysis of those will enable them to narrow down and identify more users of Silk Road.

My point has been that even if you were 100% perfect in the steps you took to try and hide your identity one other person made a mistake and it put everyone in jeopardy of losing their anonymity. Face it anonymity for Bitcoin users and owners has been compromised, and there is no unringing this bell. Confidence in the idea of being able to hide your transactions from the government by using Bitcoins is gone forever.