There are two big obstacles to widespread use:

1. Trust as it applies to online transactions.

2. Speed as it applies to small face-to-face retail transactions.

If there is ever enough financial incentive for a few large trusted online retailers like Amazon to accept Bitcoins the first obstacle could be overcome.   Reloadable smart cards would encourage face-to-face retail transactions if they can be completed in much less than a minute.  Of course people would have to understand:  lose your card, lose your money; just like hard cash. 

The big advantage is anonymity. GPS, cameras everywhere, credit card trails; Big Brother isn't coming, he is here.  Of course most people don't care until they are the target and then it is too late.