I think that it is for this reason, the world governments, especially the USA, being against privacy, that Monero would probably not be as widely accepted as Bitcoin, but that's not to say it won't be more widely accepted. It think Monero potentially can become as widely accepted as Litecoin.
The sad fact is that nobody cares about privacy. People are fat and complacent sheep. I asked all my friends and family to install an encrypted text message app and guess how many actually installed it? ZERO. It is a very easy to use app (Signal for iOS and textsecure for Android) so I don't understand why they won't do it.
I can understand not using encrpyted PGP email, even I cannot figure out how to install and use it!! But textsecure and Signal are easy to use, just like normal text messages.
Even in the American revolution, only 3 PERCENT fought or supported the revolution against the British. The other 97 percent just didn't care. Today, the percentage that just don't care is probably 99.9 percent. I remember, during the Vietnam war, there were massive anti-war protests. Where are these protests against the fighting in Iraq and Afghanistan now? People just don't care.
That's why Snowden is a martyr and a superhero. Honestly, if I were him, I would've just shut up and accepted my $300,000 USD per year job working for the NSA. People just don't care about his sacrifice. He's basically under house arrest for life. For what? For the masses who don't care if they are enslaved sheep.
Anyways, my point is Monero will never be the next Bitcoin, but it could replace Litecoin because most people don't care about freedom and privacy. They just want to get fed, drive nice cars, and be fat and happy. Monero could increase greatly in value, maybe 10 to 20x in value, but not 1000 times the value.
P.S. Understand that this is not a knock against Monero. I like it a lot. I am actually programming an app for Monero for people to buy and sell stuff, just like ebay, but better because I want to offer services, too, not just the sales of goods. In order for Monero to be accepted, we have to be like Amir Taaki and code apps that increase the demand for Monero, just like Amir Taaki did for Bitcoin. I think Spagni's (fluffypony) new dice gambling site for Monero is a step in that direction.
You are absolutely right. Monero will never be number one, nor even number two or three, imo. But hopefully it will be used by fraction of people and internet service providers who actually care about privacy. Just like tutanota or protnomail cant be number one or two among the email providers. The thing is, they dont have to be #1 or #2 to be profitable and successful. As long as there is a fraction of gmail and hotmail users to use them, they can be successful.