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If the restrictions on the sale of dollars don't change, then the only thing I can see happening is that the price of the black market dollar will go up. Perhaps they're betting on this, and hope that it goes up so high (>$6.00 ARS) that it will be unattainable for most. According to some news...

But with a shrinking national economy, a $12 billion USD energy bill, and the prospects for slower growth worldwide, trying to keep every single dollar is the easiest decision to make. Sure, they could do this and that to make Argentina more competitive and increase inflows of USD, but these are...

One downside is if you ever have a problem with the Argentine authorities, you would not be able to call upon the US Embassy for assistance.

Not really. You just need to keep your common sense like in any other huge city, and you'll be fine. unless you chooze for live a dangerous neibourhood from the west end.