In terms of 0 confirmation spends, 1 minute might as well be 10 minutes might as well be 100 minutes. Your average credit card transaction is on the order of seconds. NO store is going to be willing to wait for a confirmation in either case. This is why coinbase exists, they don't need to wait, the store gets the green light immediately and coinbase takes the risk. As the volume goes up, that fee will go down no doubt. This is also totally separate from sidechain solutions.
This is exactly right. Bitcoin's block rate still has everything settled with very high certainty after a couple of hours. No matter what coin you use, there's going to have to be a third party that charges a fee to assume the transaction risk, and two hours isn't really different from 20 minutes. Although I still contend that a faster block creation rate is more secure, I also understand that it doesn't really matter in normal use because a third party will be assuming the same amount of risk regardless.