Ethereum just looks like a gigantic Ponzi right now, especially with two chains that are backwards compatible up to the fork (replay attack). so, no I do not see how it is a threat to Bitcoin's dominance.
I'm sure you guys must have heard by now, there is talk that the DAO hack could have been an inside job. That's actually the first thing that came to my mind after I read about the hack, it felt like those loopholes were purposefully allowed to exist, it could even be that the whole code was built around them. As if the hacker had just been biding his time all along, testing the other coders to see if they would notice the flaw. And then when he was happy nobody had noticed he acted. If it was indeed an inside job and the hacker is not found, trust within the community will definitely take a serious hit.
https://www.cryptocoinsnews.com/source-ethereum-insiders-believe-dao-hack-inside-job/Indeed, I am amazed he has not been caught because it's obviously someone within the team.