The "there can only be one" camp of Bitcoiners do not understand that altcoins supporters don't necessarily think that any altcoin will overtake Bitcoin in value. I can't speak for everyone, but I believe that Bitcoin will always be the "one" cryptocurrency, the crypto reserve currency.* But there will always be room for a few more cryptocurrencies that are adopted widely just like Bitcoin. These cryptocurrencies will have independent economic models and not pegged to Bitcoin and will have a free-floating market price. As toknormal said, the market has already decided that altcoins have a future. The market is smarter and more efficient that any one of us. You can say "shitcoins are dead" a million times, but that doesn't change the fact that Litecoin has a $60M market cap and that people are willing to trade them at ~$1.80 a coin today. This doesn't guarantee that Litecoin will survive in the long run. But one thing I know for sure is that there will always be altcoins.
For those that think Bitcoin and sidechains (pegged Bitcoin) will cause market cap of all altcoins to go to 0, do you also think that all countries should adopt the USD or peg their currency to USD?
* And that is why I work for Coinbase.
I don't see what point you are trying to make with your USD analogy. Fiat is a source of wealth for governments (printing money doesn't increase a countries wealth, but it increases the printers portion of the pie). Now why would China for example want to give the United States the ability to constantly decrease China's portion of the pie?
I've said it before and I'll say it again, why create entire new coins/distributions for every new idea/feature/use (micro/merchant transactions, smart contracts/properties, anonymous transactions, etc), when those features could simply be built upon Bitcoin's rock solid system/distribution?