PayPal dollars have no value except that PayPal will often (*cough*) exchange them for real dollars later.  What made PayPal a household name is the ability to move money around on the Internet fairly easily, and allowed people to make payments to people without having to give out private info (credit card numbers/etc.)

Bitcoin is superior to PayPal in pretty much every way except chargeback / consumer protection.  (It may be somewhat heretical to suggest here that the inability to reverse Bitcoin payments isn't always a great thing for everyone, but there you have it.)

As to obscurity: what would you have given to be "in" on the PayPal idea before most people had heard of it?

What needs to happen is: we need to get people to hear about Bitcoin and understand it *before* The Powers That Be can slander it into illegality.  We've already seen the power of the Internet to get the word out and affect legislation that's clearly against the public interest; but before that can happen, the public needs to be aware of their interest in this.  People have been trained to think that their money isn't really theirs to control; introduce them to the idea that it really should be.

TLDR: Evangelize!  And Bitcoin will be a household name like PayPal is.