This is true but people how many of these merchants don't accept other payment methods? Not many. The real value in Bitcoin is that it's a free money, not as in free beer, to paraphrase free software. So it represents a super-set of what you can buy with state currencies. Sure, much of that is illegal stuff. I think people will slowly wake up and experiment with what free money can buy and one of the potentially most important is "free speech", "free thought" products, ie. uncensored trade, unregulated knowledge.

I don't think this has been barely explored. I imagine a day when musicians or artists commonly have Tor hidden services and accept bitcoin for support.