You're not clear on the velocity of the marketplace. At this moment in time, being able to convert to fiat instantly is NOT a good thing. You WANT people to stay in the world of BTC. BTC will never be a viable currency until people want to earn it, spend it AND hold on to it. Otherwise, its just a play thing that no one will take seriously. Besides, the trading is so thin right now that a couple of large purchases that are instantly put on Gox can have a widespread, negative effect. In my experience (keep in mind that I deal with some LARGE wallets) it can take as little as 100BTC to really affect the price. When I have 150+BTC to sell I take my time, usually at least 24 hours, sometimes more.
Yes, we want people to stay in BTC, but paradoxically the way to do that is to make it as easy as possible to instantly convert to fiat.
Increased BTC->fiat liquidity makes people feel more comfortable holding bitcoins, so they'll hold more of them. Whenever something happens that makes it more difficult to convert you see a price drop as large holders run for the exits out of fear of becoming illiquid.