Well why not if they can make it stick let them go for it, anyone else would. Eventually as India and China gain a greater share they will do the same maybe. I imagine they will be as gracious as the US Government.

This is one of the issues, I consistently fail to comprehend. After all, everybody is free to configure their name servers any way they damn well please.
If someone does not like the way root servers are run, they are free to set up their own. For instance, a few of us intend to squat (errrm homestead) the .p2p TLD. What control the USG or anyone else has over this? If people don't like it, they won't use it. Simple as that.

Everyone is free to do so, yes. But the vast majority will not do so. It's like saying that everyone is free to write their own currency software and issue their own currency. Sure, but will people? No. Everyone is free to leave their country, but do they? For the most part, no.

So thems that control the "one true currency" or "the national borders" are in a certain amount of control. This is as true of the Internet as it is of many other things - there is a theory in economics called "path dependency" which explains how difficult it is to change things once they are laid out and built upon (somewhat discredited by enlightening nontheless). It is used to explain why we can't ditch the qwerty keyboard for example.

People have tried to set up their own roots. The economics simply aren't there. So, if you have a real large community and they are willing to support running an alternate root, then go for it. "Knock yourself out," as they say in the US. But at some stage you'll hit the fact that what you really want is to reach all the other people out there. And for that you'll need to go through ICANN. And for that you'll have to be doing something that the USG approves of. Bummer.

I disagree. Leaving the country (esp. entering another one as something different than a slave) is prohibitively expensive for the vast majority of people. This is a monopoly enforced by (the threat of) violence. So is money.
As for the rest, I disagree. All those "free market monopolies" are not monopolies in the sense that they cannot charge monopolist prices and do other things only monopolies can. Because the barriers to entry are actually extremely low and if there is any benefit in switching, people will switch without a second thought. Google is not a monopoly. If they start doing evil things, people will switch. After all, Google usurped the "monopoly" of altavista the same way.
Right now, ICANN does the best possible job, USG or no USG. My nameservers also point to their roots, because it is better than the alternatives. But remember, when Verisign abused their position and used unclaimed .com TLDs to advertize themselves? They would have lost their position in a matter of a few months, had they not backed off. Many people (incl. myself) already configured their nameservers to re-interpret .com replies.
Thus, I maintain that USG cannot abuse their position with respect to the DNS root. They are not free to do whatever they want.