Sure one could argue the mom and pop online retailers might find value in this alt coin, but I would assume they would probably just accept a widely used crypto like Bitcoin since it is more universally used.
Yeah, I don't see the point in creating an altcoin that can only be used specifically on your platform along with a few others. Customers are always going to be looking at the simplest solution, which will hopefully be Bitcoin in the future. Less conversions is always better.
For online retailers like Amazon or eBay I think this would be a negative factor with the amount of illegitimate 3rd party vendors. Also, not sure how customers would feel about this in general. Having their money held hostage unless the merchant deems them innocent. Sure from a legitimate vendor's point of view your synopsis is spot on, but customers will always think of the "what if's" when buying certain products, especially high priced items.
Well they're already middlemen, so they have to act as escrows which I realize isn't the most elegant solution. I have to confess that when I said that statement I was thinking more about small personal businesses, and from the perspective of the business owner. There could be problems regarding trust either way, yeah.