The idea was to ban trading, not mining. If Coinbase and all the other legitimate companies that facilitate crypto markets for U.S. citizens had to drop PoW coins it could tank the price significantly and set the coin mining industry back to when it wasn't such a huge problem for energy use and GPU supply. Speculation would move to PoS currencies and BTC would stay valuable, but would act more like an altcoin.
Unlike drugs which have limited substitutes (alcohol and caffeine I guess), PoW currencies would have several functionally equivalent replacements. I doubt we'd end up ravaging underprivileged communities as they turned to black market Bitcoin.
You're only proving our point. USD is a reasonable currency for savings and/or as world-wide currency as long as it's liquid, non-volatile, backed by a big, stable and powerful economy. This could change, but not overnight.
BTC's main uses (speculation and laundering) are possible only as long as it can be exchanged into fiat. This can change tomorrow if the right strings are pulled.
trading is only a small portion of bitcoin's market cap. most coins are outside of exchanges, in noncustodial cold storage. even without smooth trading platforms people will trade bitcoin peer-to-peer because bitcoin solves real world problems
