I definitely see the appeal of protocol defined supply (hard limit) of btc that has no requirement for physical backing.. with clear incentive mechanisms .. at least now and clear rules on how those coins are minted

However I argue creating arbitary assets backed by something physical on top of Bitcoin is not a fundamental misunderstanding, if anything those that imagine the scope of the applications of blockchain technology is limited to moving bitcoins back and forth have a short-sighted viewpoint of the potential we have here.

Perhaps the biggest problem this technology solves is verifiably replicating a uniform ledger across many untrusted or competing participants.
That ledger can act as a database for user defined asset registration of anything.. control of a private key grants control of property rights- You then have a cryptographically secure, transparent custody enforced by bitcoins well understood blockchain consensus mechanism . We're far from using this tech as  magic pill yet but i think there will be constant evolution and dramatic progress in that field.

Tangible goods are not going to disappear. Neither are those that want to hold or speculate on them. Bitcoin isn't a dominating currency or commodity right now..Even  if it was there will always be diversity. These tokenisation/'blockchainification' systems are bridging traditional commodities onto the bitcoin network where they do not lie on any central server, can be trustlessly traded p2p or used as digital representations of bailment receipts etc. Obviously risk outside of the blockchain walled garden requirement for trust is not eliminated entirely so a semi-trusted approach is taken. In the case of precious metals example above they issue a certificate of order from dealer & proof of custody with a depository (which themselves have external auditors) where it is held under segregated accounts. I'd say it's a better peace of mind than you'd get from traditional paper gold. It's a kind of physical/digital hybrid- the past has certainly shown demand for things like that.

In future Novel Banking API's, Smart contracts , Trusted computing/secure enclaves, Homomorphic computing, Zero knowledge proofs, sidechains etc open the gateway to way more advanced applications of the blockchain than the primitive apps currently built on it today.  

The classic example given here https://en.bitcoin.it/wiki/Smart_Property is of a car who's ownership is linked to a private key.  Based on that model you could, in theory create a token "Backed" by BMW's, and since both the BMW-token and the bitcoin could be swapped at once whilst the requirement for trust has not been eliminated entirely it has been reduced. A middleman has been cut out.

Smart property could be purchased, transferred or rented on the blockchain. Blockchain becomes a form of DRM. Airbnb for cars, bikes is possible.. I think it will be interesting to see some of the huge innovation here in the sharing economy and rise of decline of ownership in the coming years, I think it's wise not to discount it too quickly

Another example is banking API's  that can show you a cryptographic proof certain amount of fiat was sent/received and currently owned. In conjuction with moving control of the accounts to open smart contracts it's possible to represent fiat on the blockchain. This strategy can potentially ameliorate doubts with fractional reserves of fiat on centralized exchanges.None of these are anywhere close to being total panaceas. There are always external (often human introduced) weak-links but they do help in bridging intangible with the tangible.