It's easy saying what you would've done if you were in his position after the fact.

yes but you should always have the wallet encrypted......I cant believe he did not do this so sure they can seize the wallet but they should not be able to spend the coins

How does arresting DPR reveal the identities of the sellers on SR? They should be safe.
Only thing that will change for them is that they will start selling on BMR instead of SR.

And WTF... he got his door knocked on in June 2013 and he doesn't close up shop?

An indictment from the U.S. District Court in Maryland alleges that, in January 2013, Ulbricht attempted to arrange the murder of a former employee who had recently been arrested by the feds. Unfortunately for him, the “assassin” he tried to hire was an undercover federal agent.

According to the indictment, Ulbricht sent the agent $40,000 up front; once the hit was “confirmed” by means of an elaborately staged photograph, Ulbricht sent him another $40,000. Ulbricht’s alleged response to the photograph is dripping with irony:

After receiving the photograph, ROSS WILLIAM ULBRICHT, a/k/a “Dread Pirate Roberts,” a/k/a “DPR,” stated that “I’m pissed I had to kill him … but what’s done is done[,]” and that “I just can’t believe he was so stupid[,] … I just wish more people had some integrity[.]”

I wonder if this means the mass arrests are coming? I would assume the FBI now has a list of customers and sellers. If you are a customer you may be safe, now that the DOJ has stated that they are no longer going after users.