I really think that there isn't a necessity to replace the dollar itself. I mean, we can certainly have all the currencies working very well, and if people have the right to choose what currency they want to use? Then no problem. What should be gone are governments forbiding their people to adapt Crypto-Currency. And let's face it, dollar is too strong and it will continue leading the world for quite some time.
Right, the dollar is very likely to get an upgrade and the people that spend Bitcoin will be able to exchange their coins for fiat much easier than they can right now. The dollar is likely to have a payment system developed within the upcoming years and the people that use it will have less physical dollars in their pockets.