With something that can be easily cloned to a different codebase (not something you can do with gold or silver), has no tangible uses (Gold and silver does)
1. Code can't really be cloned (see below)
2. There is a tangible (sort of) use
As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:
boring grey in colour
not a good conductor of electricity
not particularly strong, but not ductile or easily malleable either
not useful for any practical or ornamental purpose
and one special, magical property:
can be transported over a communications channel
If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.
Maybe it could get an initial value circularly as youve suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it
B - Technology. By definition economic adoption needs stability (fiat dollar, gold, shekels, whatever) in order to be productive. Technology in order to improve by definition needs to be disruptive. Ethereum will be able to do everything bitcoin can do transaction wise with a fraction of the space and bandwidth (because they plan on doing so much other stuff they HAD to optimize). When polotics gets in the way of technology - another coin will move in to wipe an old one out.
I agree with you that better technology can sometimes replace worse technology, though not always. I disagree that merely cloned code can do much of anything, otherwise LTC would be more than a pimple on BTC's ass.
As for obsolescence, that will have to play out in the market. Eventually a technology matures to the point where it is good enough and dominates a market not because it is the best possible solution but because anything better is not better enough.