You could, because the government could coerce the person who stole it to give you back.

So in order for this decentralised government idea to work, all you need is... A centralised government.

Right, gotcha. But doesn't that work just as well with only a centralised government?

I would consider this to be a corner case, that does not disprove the point I made.

It could be the norm. It all depends on how the society is organized. If there is a system of law and a court and you prove someone stole something from you, the government will coerce that person to give you back or pay some sort of fine. For instance, even if the system says you own those bitcoins, a court can rule that you give it back to the person you hacked and also pay for the costs of the case. The same goes for smart contracts. A court may rule that the contract is invalid and require one of the parties to pay the other, regardless of the smart contract. So, that technology doesn't, in and on itself, revolutionize any of that. However, it could be made into law that a court cannot revert a smart contract or that the contents of a digital wallet belongs to whoever has it, regardless of how it was obtained.

This norm and that system already exists and works just as well (or as badly) without blockchain, so what value is added by blockchaining it?