I have the following issues with the idea of BTC retail transactions:

1. Confirmation Time: It takes @ 10 minutes to get the first confirmation that a transaction has been processed. How does that compare to a credit card swipe? Win for the existing system.
2. Price Volatility: The volatility is enormous relative to day to day transaction costs -- how would you like your paycheck to vary by 10% from day to day.   Win for the existing system.
3. Wallet Security: Finding a secure wallet is not easy. Concepts such as hot and cold wallets don't inspire confidence. Why bother when I can just swipe or pay cash? Win for the existing system.
4. Regulatory Risk: Certainly an issue for fiat/crypto exchanges which may or may not apply to merchants in the long run.
5. Payment Risk: No recourse if you send payment to the wrong address
6. Public Key Length: No one can deal with the length of those keys, it's either an alias or the QR code. QR codes aren't really familiar to most people. Establishing alias's takes time and a little bit of sophistication.

It doesn't take more than one of these issues to turn 99% of people off. Until these basic problems are solved, I'm not surprised that the Bitcoin economy hasn't grown as rapidly as some would hope.

Where is the upside case?

1. Safe Haven: No way with all the volatility.
2. Transaction fees: Unclear when you add in the cost of converting to and from fiat. In any event, any savings are small potatoes, yes?
3. Time Savings: For domestic transactions, no. For international transactions, there is a real time saving in getting funds anywhere. However, once they're "there" they still need to be converted back to fiat to be of any real use.

On balance, I think it's amazing that BTC has come as far as it has given the above...