But currently this only works in third world countries where the government lacks resources or care to combat it. Plus their is still a middleman if you don't mine the cryptocurrency yourself. I still have to pay a exchange if I cannot find someone willing to take cash/check from me. You also have the opposite effect where you need the exchange and a bank account to turn that coin I sent into usable cash.

Most of the world's population lives in third and second world countries. You're absolutely right that the centralized fiat gateways are the obvious, censurable bottlenecks of crypto-currency, and there's no good way around that, but crypto-currency itself is still an attractive way for many people, to move their money out of very restrictive regimes. The centralized exchange problem is mainly a problem of creating a black/grey market economy, with crypto-currency as it's main unit of value transfer, which of course is a whole other can of worms.

Correct, but you only have to trust a centralized company within your own country. You don't have to trust a bank or money transmitter in a foreign country. In the case of people in countries where they don't have an adequate level of government protection over financial transactions, I think it becomes more interesting. In cases like those, it's possible they don't even value their own local currency as a store of value and might feel a cryptocurrency has better odds of being worth more than zero by the time they need to spend it.

Maybe that's enough of a use case for an established following that supports a long-term 'market' for cryptocoins. Maybe the ideal (or something closer to ideal) would be that people in too-strong States got to use it; but there are enough people in too-weak States with dreams of authoritarianism