Defense from Government Intervention What's to stop a government, say the U.S. government, from saying "Hey, it's okay if you want to use Bitcoins, but you have to use at least version 0.6.3".

And then a year later changing the law to "Hey, it's okay if you want to use Bitcoins, but we're going to make sure you're using the most up to date version of the Bitcoin client through the XYZ Act."

Then another year, a new bill: "Hey, you love Bitcoins, right?  How about this new bill that 'improves' security by requiring any Bitcoin clients to include features ABC."

Yet another year goes by and: "Woah, hey, we can't let you use a non-licensed bitcoin client, that wouldn't be very responsible!  Make sure you use one of the clients on this list!"

365 days later: "Hey man, how are you liking your Bitcoins?  Oh, great, well, we just wanted to let you know we're going to put out a client of our own.  Oh no, no major differences, we just want to make it more secure.  You can still use 3rd party clients, this just gives you more choices! GO USA!"

Another year goes by and Bitcoin is in large use by PayPal, Amazon, Ebay, NewEgg and thousands of other big name companies as well as millions of small-time mom-and-pop sites.  The government regulation and licensing requirements continue to develop and change the nature of the Bitcoin algorithm and blockchain (having the innumerable thousands of businesses using government licensed clients allows a higher than 51% control over the algorithm and blockchain rules).

Pretty soon the government dictates new code and rules that allows the easy creation of new coins by government machines.  It could also allow the insertion of a tax that strips a very small percentage away from each transaction that is sent to a central government address.  It could introduce anti-privacy changes to track geographical location or IP addresses attributed to each transaction and address.

My question is, what can we or the developers do to stop the slow year-by-year encroachment of seemingly "harmless, even helpful" laws and regulations?

If Bitcoin ever seems legitimate to Big Business and is used on very common basis, many business will gladly give in to government demands to use regulated clients if the law says they must.  A large scale switch to a government corrupted client could gain a greater than 51% control over the Bitcoin network.  All the government needs to do is wait for those willing to acquiesce to its demands to grow to more than 51%.

What can be done to prevent this?
The scenario you name would be great for cryptocurrencies as it would make them mainstream. As soon as people got sick of govt intervention with Bitcoin in such a scenario, it would probably be relatively easy to get enormous numbers of people to switch over to a very similar (but independent) Altcoin. 

The nature of the cryptocurrency technology is such that it is very difficult to stop people running the software, but a govt could have success in closing down businesses that accept unofficial versions such as the fictional Altcoin. If that happened, it could however still thrive outside of the region being regulated.

Prevention would probably need to occur at a political level, but I'd hope market forces as I've just described will be sufficient prevention as long as no organisation gains too much power over international law. Agreements negotiated in secret like the TPPA are something to watch out for though.