It's a good question. On-chain transactions don't scale well but there are many solutions which only require on-chain transactions to fund some initial channels and then subsequently if a participant misbehaves. One additional benefit is the micro-transactions are not stored on the main blockchain, further improving privacy.

Bitcoin's lightning network is an example of this, and is currently up and running. Fees are incredibly low, currently averaging .0098 cents: https://1ml.com/statistics