But I think bitcoin will end up with fractional reserve layer on top simply because 95% of end users will allow it. They simply don't understand what fractional reserve is. Final end users will only know that their currency is "backed" by bitcoin and may see a nice reassuring holoram on their card or something. They will know nothing of the blockchain etc. And if you try and tell them about fractional reserve they will glaze over as soon as the first word "fraction..." passes your lips.
Well you are right, that people won't understand the intricacies, but I believe they will very well understand when somebody tell them, "Hey your bank doesn't have all your money". They will take them out ASAP, thus all finance business will avoid using FRB to avoid being vulnerable to bank run.
I think in history there was never FRB sustained without government intervention.
Have you ever tried telling someone "Hey your bank doesn't have all your money"? If not give it a shot. You will find the FRB system has installed some kind of firewall closing all logical ports resulting in most people thinking you're full of it or that you're trying to con them somehow.
But indeed throughout history all debasement experiments have ended in "failure" from the end user perspective, conversely viewed through the eyes of the schemes originator they have been very succesful (except for the ones that got beheaded).