The network-at-large is pretty large.  I would doubt a DDOS attack would be effective.

For a limited time, sure.  However, even if you could isolate every known node from one another, you would still have to be (or connected to) the largest of the isolated networks.  A botnet can't realisticly stop these nodes from generating while isolated.  Artforz, alone, once represented 5%+ of the network and his setup is on a private network, not a pool.  So even if a botnet was large enough to fracture the network, the botnet owner's clients would have to be able to out run Artforz, any other miner of equal or greater capacity, and the total of the clients that it couldn't blockade.  For the blockade must end eventually; and when the network reconsolidates, the blockchain with the greatest proof-of-work still wins.  That could be the botnet owner, but it might not.  Participating honestly in the mining is still the best overall business plan.  This is actually part of the point of the way the mining system was designed.

Sure, but by the time it's not, the size of the Bitcoin network will be much larger than any botnet.  And this kind of plan assumes that the major players in the network right now just sit back and do nothing while a DDOS attack persists upon the network.  This is unlikely, and all that it would take to completely deny the botnet owner his ill-gotten gains would be for Artforz to set up a couple of modems on his network and connect directly to a couple other major players to directly trade blocks.  Furthermore, there is no certainty that such an emergency physical peer connection network isn't already up and running.  How would we know if Artforz and the other major miners have privately discussed this or not?  With the capital costs that these miners have already commited to their systems, a few modems and a script to call one another directly over POTS (even if it were long distance) would be a small additional cost.

If they haven't already discussed this, they will be shortly after seeing this thread.

I can't disprove a negative.

I'll just say, give it a try.  See how it works out.

From experience, the answer to that is never. E.g. the US dollar is the biggest reserve currency the globe has ever known and by some accounts it has just gone through, or is going through, a speculative bubble blow-off phase with reserve banks all heavily invested in US dollar denominated assets that they are beginning to unload on. Gold is the next biggest, depending on how you do the valuations, and more stable but has been subject to periodic manipulations and manias also.

Currency failure risk is always there, however remote, because humans' value systems can be extremely stable or extremely fickle.