There is a lot of power in a democracy. Even though the US government could do a lot of things, there is always the risk of public outrage, and it's their fear of them that stops them from making decisions like these.

Let's say hypothetically, this did happen, and tomorrow the US government imposed a new ban on bitcoin. What do you think would happen?

There would be a lot of angry people that their savings where lost, and so much public cry it just wouldn't be able to be silenced.

The US considers itself a leader in technology, and for them to ban a new up and coming technology would make them into a laughing stock.

No government can technically stop Bitcoin but it can make things around it very difficult and this is what is being done in China. With the kind of government that USA has, its good thing to see that it is not really as paranoid as China. Now, although transactions in Bitcoin can be less transactions for the dollar, we should note however that eventually if we are talking here of the usual business or even with eCommerce (which is gaining traction) the Bitcoin is going to be converted to the dollar anyway. So at the end of the day, Bitcoin is also acting just like a foreign exchange, not really a big threat to the government nor the dollar. Plus, the government now understand that this is just like any other industry and therefore it can gain a lot with implementing the taxation laws on it in every turn and twist.

Even if they implemented a ban, the execution of such ban would be difficult and would be more of a waste of time and money rather than actually solving a thing that is not even a problem. Remember that Bitcoin is decentralized, and unless they'd get a hold of more than 50% of the nodes, they won't control over the network. Also remember that most Bitcoin nodes are located on China, which is not within their territory, add that to the fact that China is one of their oppositions.

A congressman already admitted that Bitcoin at this point is unstoppable. It is pointless to worry on something they cannot shut down or totally kick out from their territory. If they ban Bitcoin, it would only push its people to use Bitcoin underground.

US is well developed country with good practice of democracy so opinion of 3% of population also matters. Most of the crypto based companies are from US and have customers around the world so they cant just ban bitcoin outright, this wil affect customers around the globe and they will also loss significant taxes from those companies.

World follow the trend set by US which is quite positive for bitcoin economy.

I think it's too late now for them to ban it for a few reasons.  For one thing, futures contracts and wall street money have already started, so it's hard to reverse course.  Secondly, the US government seized the Silk Road Bitcoins a few years ago and then auctioned them off to the public.  It would look very bad for the government to auction something to the public and then ban it.

Because if you were to try to ban something completely , it will actually cause people to want to use it. (Telling people they can't do something will actually encourage others to do it because humans are attracted to the things that others may view as "Illegal")

Example. The US made Cocaine illegal and the Usage of coke actually went up and the price of cocaine also went up significantly. Banning Bitcoin will only lead to problems for the US Governments.

That's partially true that The USD is threating by Bitcoin but in a whole scenario it's not, Basically, Bitcoin is a virtual currency which is used by a lot of US People, they are trading with Bitcoin, they are investing in Bitcoin along with they are working on several projects in Cryptocurrency as well, not only that but also Cryptocurrency is being developed around the world day by day so the USA government is not trying to stop Bitcoin because they know their people already got involved in this system, If they ban Bitcoin system then their people will face a huge loss, but who knows what will they do regarding this issue in the future.

OP, they can't. Or maybe they know they can't. But there was a window which they should have, during the boot-strapping phase. Plus there are other cryptocurrencies, and there are pro-Bitcoin politicians. Simply, "The cat is out of the bag".

nobody thinks that bitcoin will compete with fiat dollars basically it's just an exchange of values, whereas bitcoin keeps its value well maybe because fiat currencies like the dollar don't keep any value and inflation or something else, don't blame bitcoin should the US government embrace to collaborate

this is very true, they uphold freedom of democracy and others but they themselves who deny it are also even very funny if they forbid all US people to use this bitcoin