Lets just accept that this wont become a reality.Yes, smart contracts is revolutionary but we cant really just deny that there are things which do works only on where government or in short in centralized things.

Just like been mentioned above by hatshepsut93 was actually on point.So dont expect that it would really happen and both things do function on different key areas.

Why would really pushing that it would really replace the government? Everything would have their own function of its existence.

I think that would be too much for our speculation about crypto. Indeed it is a coin that could adopt to many changes yet it still has limitations on what it can only do for you in your life. The government functions mainly to maintain peace and order for everyone in the country and to exhibit fairness as well as solutions that is much needed by the country. Crypto's function is so far away from ruling people, you cannot expect them to simply smile and get excited upon ruling a nation. It may innovate more in the future yet I don't think it can ever change its current function.

But without government intervention, there might be total chaos in one country?

Yes, we have crypto and those smart contracts, but I do doubt that it can truly replace a working and able government. We can used and take advantage of smart contracts though, even the government can do that. So why not we have the best of both worlds in our hand? We don't need to sacrifice any of them.

in the long term maybe a technology akin to bitcoin,but short term,no,no chance,those who are in power are afraid of btc and will try to destroy it at all cost (with no success of course).

No, this is impossible to happen. Pure democracy is even an illusion. It is an idea, a good idea, but is simply an idea. In the human scheme of things, you cannot expect that the ideal is possible to happen. Human beings are not ideal creatures. You cannot expect purity from human politics.

We may mean good about this but we should cease expecting too much from cryptocurrency, blockchain, smart contracts, etc. They are not as powerful as we imagine. They cannot create paradise on earth.

Everyone has said no, but have you looked at crypto-collaterized stable coins like DAI? In >6 months, it has maintained almost a perfect peg 1:1 to the US dollar - solely by the actions of decentralized persons. That is better than centralized coins like USDC and nearly as good as Tether.

Switzerland operates as a pure democracy. They are the 6th richest country in the world, per capita. It is a reality. Why not move that voting system to the blockchain? Why can the blockchain not be the "leader?" Most cryptos have a consensus voting mechanism. Why do people feel they need a figurehead?

If people don't believe in smart contracts, then how are smart contracts expected to replace simple things like real estate contracts, health records, etc?

Fascinating! I did not know Estonia had moved voting to the blockchain. That's not all... Brilliant!

That's a fair point. I was thinking more in broader terms, such as the blockchain being used for establishing rights, voting, allocating funds and providing a currency. Individually appointing positions for defense, etc. would not be practical for the entire population to do. You can't replace people with technology there (at least not yet).

Those cryptocurrencies cannot scale to the point to support an entire economy. They weren't able to handle the load of CryptoKitties a few years ago, what makes you think they can do more than that?
Most governments don't want a pure democracy. You are given an illusion of democracy, but that designation reaches only as far as the interests of your government. Try to go above that and you will experience the same democracy that many whistleblowers experienced.

All those suggestions made in the OP will never be decided by the people. You can protest against war, but war will still happen. You can complain against the banking elite, but they will keep pulling all of the strings and most people will just nod their heads and go along with it.

If you want privacy, your government is the wrong party to turn to. You have to find ways to keep it yourself because they surely aren't interested in you staying under the radar.

To answer your question, no, such a system wouldn't work.   

Government systems and cryptocurrencies are different, government systems need personal control over everything, while cryptocurrencies are digital currencies. 
Inever thought that would happen, but if everyone owns Cryptocurrencies then the possibility that happens is that the change of currency from manual payment systems or Fiat will be replaced Online by Cryptocurrencies.

We don't understand that government is all like control. The government make the society orderly as it is now despite that there are problems and issues of human relations and we can compare that to when if there were no government? The situation is far better with people at the corridors of human affairs, to lead, guide and control the activities of human.

That said, we can't have cryptocurrency taking over government because that will lead to uncontrollable confusion. People won't have any fear to kill the next person because no body to send them to jail 

I think the government and Cryptocurrency can exist together as we see it going at the moment despite government making plans of control but we don't totally see such happening.