I think you under estimate the apathy of the general public. They don't care what the banks do to them or their money, just like they don't care what their government does with their taxes.
Not necessarily apathy, the general public is simply pretty ignorant about concepts such as Fractional Reserve Banking
Your average Joe doesn't even realize that the Federal Reserve is as federal as Federal Express
for those who are still bemused by the banking system, here is a humorous half-hour cartoon explaining it
https://www.youtube.com/watch?v=mII9NZ8MMVMWhat kind of legal measures could someone take if the borrower defaults on a loan?
Services like btcjam and BLC use Net-Arb which is useless in many cases
Bitcoin needs wider adoption and recognition in order for governments to create the legal framework needed for btc lending to truly scale
However the current lending model based on reputation has been working better than most expected