At present I see people use PayPal much than bitcoin as PayPal has reached people through various forms than our bitcoin. People hesitate just it looks to be entirely new technology.
There are many aspects that may hold back new people to use Bitcoin. The media aspect is a big part of it. They have been reporting bad news after bad news. When there is a bomb explosion somewhere in the world, they directly say it is financed with Bitcoin while there is no proof at all. I never see them report anything good when it comes to Bitcoin.
Thats because of the whole mt.gox story made people see it bad, or very sketch.
And when they heard the silk road event as well, it just makes it look worst for a new comer to even bother with bitcoin.