Well no, it seems they are making a difference between an application (Tornado cash) and base layer (ethereum). They banned github repo, why not ban ethereum which also publicly holds the contract? A case could be made that if a tornado cash developer enabled criminal activity (or whatever the charge is), every ethereum developer also did it. Vitalik too, why not arrest him?

Instead, this is the government formally embracing ethereum base layer, and saying "we call the shots here, we decide what runs on it or what doesn't ".

They are actually policing the blockchain, which means they own it.

Mark my words, ethereum will soon be our biggest enemy.