you could say that, but you have yet to fully specify the system and as a consequence i can only poke around and look for week points.
I agree. However, if the network can perform as I will describe, the best EvilCorp. can do is temporarily fork the network. This is the "end game" scenario if EvilCorp has sufficiently infiltrated the CN and the SHs. What they will accomplish is being able to confuse *some* people temporarily, at the cost of their shares being destroyed on the honest network. Unlike bitcoin, an attempted takeover will be quickly and ultimately obvious to everyone who has paid attention to the network for any length of time (SH activity is kept in separate ledger so that even light clients can verify the network has not had any problems very easily and for a small amount of bandwidth).
To convince the people that EvilCorp.'s network is the honest one, they would have to control every corner of communication within and outside the network. It simply is not feasible for anyone to accomplish this in a sufficiently large network (or even a pretty small one). Honest merchants are intended to be the primary SHs because they will be able to recoup their transaction fees for essentially no effort while securing transactions at the same time by only keeping track of network data they already needed to keep track of for timely confirmations (efficiency++, decentralization++). If you are one of the confused and Amazon, Walmart, and Best Buy all say "hey d00ds, this one's the honest network", do you believe them, or do you go with the side that isn't identifying itself?
And what can this attack accomplish? Potentially getting away with a few double/bad spends on an unsuspecting victim who manages to agree to part with product even though half the network is missing? They will destroy the shares of the honest side of the network and could then potentially change the code, but no one is going to buy it.
It is an idea I came up with very early on in the Encoin proposals: allowing EvilCorp. to make its own fork and let the users decide which fork loses every single decrit they invested in causing these shenanigans. It is a PERMANENT solution to eliminating a threat at the cost of temporary confusion that will be caused anyway. Honest bitcoin miners cannot destroy EvilCorp.'s mining hardware, so they are free to continue to mess with the network on a whim. Point: Massively in favor of Decrits.