The Bitcoin protocol is fine and dandy, but the fact of the matter is that Bitcoin as a currency is dead. A currency can not maintain a store value when at least a third of it is in the hands of thieves and hackers (witness the Gox implosion and the many numerous wallet services that closed down due to theft), and the large majority of the remaining coins are hoarded. It just doesn't work. Everybody wants to be an oligarch in this new economy… it's just never going to reach the mainstream with all the problems.

Again… the protocol is fine. Make any tweaks and create a new currency and figure out a way to distribute the currency.

Bitcoin is dead.