I have no idea if bitcoin is useful for banks. What does seem fairly certain is that these "Bitcoin without the bad guys" pitches are pretty flimsy.
Sort of how years ago some people/companies would claim that using Linux in enterprise would cause all sorts of issues for said companies in order to sell their own propritary and nonopen solution.....
As a media skeptic, the 1st suspect is the one who is ascribing motivations to other parties/groups with no evidence. This goes double when something "technical" overlooks technical alternatives that would demolish one's own argument.
As you yourself noted, if a dozen banks got together to do this, it wouldn't be any more centralized than what we have now!
Why does Bitcoin need banks?
Who cares if current banks ever figure out Bitcoin? For the vast majority of people and use cases, Bitcoin makes banks redundant.
According to him if a bank interacts with the bitcoin blockchain in any way (mining and/or posting transactions), they are violating a host of AML and KYC regulations because they do not know the identity of other players on the network.
Apparently the claim could be made that the bank is collaborating with all other miners/transaction creators, and the bank must know certain information about these people. Also if someone posted a transaction from Iran, and the bank helped mine that transaction, that's a big problem.
I don't know if his logic is correct, but it seems many of those in the bitcoin community are underestimating the regulation hurdle that wall street will need to figure out.