If relegating bitcoin to a low cost paypal is going to "destroy" it, then ripple's already done that (aside of the 'small matter' of it being closed source).

the point of bitcoin to everyone who portrays him or herself as "anti-stablishment", "anarcho-libertarian" or whatever moniker you wish to use is that you are able to wield an order of magnitude more anonymous purchasing power than cash, at very large distances... for purposes that require ultimate personal responsibility - the libertarian pipe dream, so to speak.  

the problem is, which government partially solves only, people will do -anything- to avoid being held responsible.

last but not least, responsibility outside of a morally imperative context, does not compute.