Yes, the US gov can easily prevent financial institutions from exchanging Bitcoins: If a bank holds US dollars, those dollars are "stored" in the US (even if the bank is located outside the US). So the US gov just needs to threaten that it will freeze the banks dollar deposits in case a bank decides to exchange Bitcoins.
No, the US government cannot easily block other types of Bitcoin exchanges. Consider bitmarket.eu: The site itself is hosted outside the US. Money transfer happens directly between individual users, e.g., by wire transfer. There's no single entity that you can attack.
And even in case where bank transfers are shut down you can still switch to cash. If you have a trusted exchange you can send cash via postal mail. Or your local drug dealer changes his business from dealing drugs to dealing Bitcoins. Of course, this will prevent many legitimate uses of Bitcoin - but I'll doubt that it can stop the usage of Bitcoin for "illegal" transactions.
I think a lot of people aren't really following this argument correctly. There is no necessity for the government to completely destroy BitCoin. This isn't about it being all or nothing, or even the government obtaining satisfaction in its efforts. The point is that they have very powerful tools to move the "demand" part of the supply/demand curve determining BitCoin's value in dollars (and by extension, the greater Global Economy that dollars are a part of; it is basically impossible for BitCoins to have vastly greater value in Euros than Dollars because that's just an arbitrage opportunity that will be immediately exploited and thereby removed). By powerfully dropping demand, the value of BitCoins will rapidly drop. The fact that they are rapidly dropping tends to self-reinforce. In minutes or hours, your "$500,000" of BitCoin could be worth ten cents. Are you going to be motivated to stick around after that? The True Believers will, but most average folk and most intelligent financial folk won't.
The end result may be an economy that the US government can't shrink past a few tens of thousands of dollars any more than it can eliminate drugs. But even if BitCoin is not "killable", it certain can fail to meet the goals set out for it, and it is pretty much within the power of the US government, and for that matter several others, to make that happen. You don't have to destroy it utterly to make it useless. In fact I'm rather concerned that BitCoin can't even survive a non-government caused shock once it is being used by more than just True Believers.
(Also, note that the immediately obvious parallel of the drug war doesn't apply; government attacked the supply of the drugs but has much less power to affect demand. Attacking supply causes prices to rise, but then the increased prices drove increasingly well funded smuggling efforts. If the government could actually remove the demand for drugs in some magical manner, the War on Drugs would be over in a matter of weeks.)
No, the US government cannot easily block other types of Bitcoin exchanges. Consider bitmarket.eu: The site itself is hosted outside the US. Money transfer happens directly between individual users, e.g., by wire transfer. There's no single entity that you can attack.
And even in case where bank transfers are shut down you can still switch to cash. If you have a trusted exchange you can send cash via postal mail. Or your local drug dealer changes his business from dealing drugs to dealing Bitcoins. Of course, this will prevent many legitimate uses of Bitcoin - but I'll doubt that it can stop the usage of Bitcoin for "illegal" transactions.