Same kind of reasoning could have been applied to bitcoin at the start. Not that I have an opinion about this or that altcoin, just pointing out the hole in your rationale.
What hole tho? The impetus for creating Bitcoin against the other existing forms of payment/banking systems was clear.
How about the delusional hole in rationale that says once we have a single crypto payment system that is secure, decentralized, functional, and popular (w/ users, brokers, exchanges, and merchants), that we need another one? Or a thousand more? Ten thousand more?
Your argument boiled down to the assertion that a novel currency/payment system that does not currently have merchant adoption could not gain traction in the future.
At one point, bitcoin had no merchant adoption and clearly it has gained significant traction.
If you are now saying that there was a need for a digital currency, and now that there is one, we don't need something else because incremental improvements will fail to gain network effects, we can look at myspace / facebook-like precedents.
Again, I am not saying bitcoin will not be the number 1 crypto in the future, in fact my best guess would be that it will be bitcoin that wins out, but I am not sure that it will.