Bitcoin is valuable because of its scarcity. The limited number of coins and the fact that it is controlled by software and agreement of the miners, unable to be manipulated by any government is what makes Bitcoin valuable. Trust in this is what drives Bitcoins value and growth.
[...]the growth in alternate crypto currencies paradoxically dooms all to worthlessness.
Think a bit different about it: A cryptocoin can be viewed as a "share" of the ecosystem surrounding it.
For example, one Bitcoin is a share (1/21000000) of the value generated by all merchants and service providers that accept them, and also, to a lesser extent, "believers" and "HODLERs" - those that simply accept the coin to be a store of value. (Hodlers may not generate real goods or services, but they are essential for marketing).
The consequence of that "cryptocurrencies-are-ecosystems" model is: If there is no ecosystem, then there is no real value. Most altcoins do not really have an ecosystem. They only are used for speculation. They may be "valuable" in terms of price sometimes, but only a few ones really have people behind them that are willing to "back" the coin if it faces problems. So most get pumped, dumped and disappear. They don't affect "scarcity" of other cryptocurrencies.
The real scarcity is the scarcity of coins that are able to build an ecosystem around them.