It will be interesting to see how the VRC developers will react to the inevitable regulatory pressure in the next few months.
You can't regulate what is self-regulated, and has no real way of being regulated (good example is what RIAA tried to do with bittorrent & torrenting copyrighted material, and everyone still shares/torrents files!)
Crypto currencies stand on their own, people see that and that is what is giving them value. I fully subscribe on theory level to the idealistic sentiment of decentralized digital currency concept and to a financial system that is free from the corrupted banking system, but the reality is that we live in a society that is governed by law and regulations. Therefore, law enforcement (by definition) will hunt down all digital currency operations that allows tax avoidance, illegal trade or money laundering. Regardless what you and I think about the moral of such law enforcement actions this is happening.
On the technicality aspect of the regulation, you are wrong and of course decentralized, blockchain based digital currencies can be regulated and will be regulated. Even Bitcoin can be regulated by introducing third party regulated parties in the trading structure. That's what is happening in the form of Paypal and Microsoft involvement when the regulated entities associate users' identity with Bitcoin addresses therefore the trade is traceable and could comply with regulations, i.e Paypal and Microsoft implement an indirect regulatory compliance.
I realize the design and transaction structure of BTC and BTC/LTC based alt currencies (like this VRC shit) doesn't allow direct regulatory compliance, however the aforementioned regulated third party entities could satisfies the regulatory requirements. Of course this defies the very basic purpose of Satoshi's decentralized currency concept, but I assume he didn't assume such regulatory pressure or he thought the community will be wise enough to deal with it if the change will be required (which seems too much to ask from the BTC foundation as the politics overtakes rational thinking and the necessary changes cannot be integrated into the design).
Summa summarum, the compliance with incoming regulations is inevitable and VRC will have to deal with it as well, either by introducing trusted third parties in the structure or redesigning the transaction handling to let law enforcement do whatever they have to do.