Part of the appeal of bitcoin to many is "Banks are so unnecessarily expensive to transmit value", the bitcoin industry has slowly and painfully been learning one disaster after another that maybe some of that cost isn't unnecessary after all.
.. which isn't really true in the EU ("Faster Payments"). It's only true in the US because the regulation is fragmented and reflexively in favour of the capitalist over the consumer. It's the banking equivalent of Comcast.
EDIT: My point is that a financial service is more than just the protocols used. Actually the protocols are the least important thing to the average customer. The more important thing is trust. I trust that my money in the bank will stay there and that transactions made using my bank will go to the person I say they should. Part of the reason for my trust is in the regulation around the banking industry. E.g. the savings guarantee here in the UK(/EU?). The bitcoin industry (not the protocol but the services around it) have yet to provide me that level of trust coupled with comparative ease of use.
I was more thinking of institutional theft (i.e. embezzlement). I'm almost certain my bank won't just vanish the money I have lent them through my savings account. Of course the same cannot be said of "Random Investment Company Name" who was recommended to me on a forum/down the pub. As yet (and I hope that this changes) non of the bitcoin service companies have risen above this level of trust (for me personally).
EDIT: Added fact that my assessment of trust is my personal subjective opinion and shouldn't be taken as a fact.
I think that many people hold bitcoin and bitcoin businesses to a higher standard than they would companies that operate outside this sphere.
At least, it would be an unmitigated disaster for the Wild West style of regulating fiat currencies.
People hold BTC businesses to a higher standard because after your BTC is stolen by 'hackers' in an ex-Soviet republic, you have absolutely zero recourse. They hold BTC to a higher standard because no individual in the fiat world siphoned off a trillion dollars into his accounts last year. They hold BTC to a higher standard because the companies operating in the space absolutely refuse to properly protect their customers.
What about the $1bn stolen from moldovan banks?
There has been no customer recourse there.
Trillion? Really? That is an order of magnitude grater than bitcoins total market cap.
Depending on how you want to measure the amount of fiat currency in circulation, 7% of that would be close to a trillion dollars.
I hold them to exactly the same standard as traditional financial services. I can see you point in that for many people bitcoin is just voodoo (on the other hand for many people traditional financial services are voodoo and people trust them with their pensions).