It will result in merely detecting the presence of Tornado activity to be unenforceable, which will then result in "smart" detection (an algorithm for which is up for debate), which will be cat and mouse forever. The law as written doesn't have this reasonable person standard yet.
I really think the OFAC regime made a mistake here. They overplayed their hands and this will result in a bunch of debate and court activity, which may reduce their power in the end. I would have started mass-blacklisting frequent users of Tornado rather than the contracts themselves, and certainly not by-default made Americans criminals who receive Tornado funds. That is clearly unenforceable and will put a magnifying glass on this issue.
You act like Ethereum is some sort of force of nature and the OFAC needs to play by the rules of Ethereum instead of the other way around. If Ethereum as a whole is designed in a way that makes it impossible to enforce current laws, it's more likely that Ethereum will need to adapt to the laws, or eth will be made illegal and anyone caught dealing in eth will be considered to have broken the law.
Governments are not a force of nature either. Sure, they're more likely to win over Eth, but I personally always remain hopeful for change in incumbent systems.
I really think the OFAC regime made a mistake here. They overplayed their hands and this will result in a bunch of debate and court activity, which may reduce their power in the end. I would have started mass-blacklisting frequent users of Tornado rather than the contracts themselves, and certainly not by-default made Americans criminals who receive Tornado funds. That is clearly unenforceable and will put a magnifying glass on this issue.