I can't pay taxes with it. I can't fund my credit card with it. Why do people value Bitcoins at $11 a piece?
Three things:
1: I would give somebody $11 for 1 btc because I think the btc will be worth more in the future than the $11.
2: I can give somebody the bitcoin and get $11 worth of value back. (Or better, depending on where you go. Recently purchased some books on BitMit.net for less than 1 USD worth of BTC, those same books would have cost me $32 on Amazon.com)
3: There is more to life than taxes. I rarely send any money to the government at tax time (my employer and government work together to take money out of my paycheck and then each year I have to ask for the extra back, last year I got about 10% of my income as a tax return).