They won't "squash" nostr, they will just try to take control of the bulk of the relay traffic either directly or indirectly, buying out or leaning on them. There will be show trials.
Just as none of this ever stopped 4Chan or TheHive or any of the other web 2.0 type freedom of speech platforms from continuing to exist, their ability to squash Nostr is far smaller, since the protocol is designed for being able to work even from a swarm made of home user's connections and a small number of VPS systems in friendly jurisdictions.
A lot of nostriches are in for a little shock to learn that they are gonna have to work for their freedom, and take risks.