If I deposit some Bitcoins with a trader like Kraken shouldn't I be earning interest on my bits?
Banks pay interest because they lend your deposit to people at a higher rate. It also protects you against inflation.
Bitcoins are more like gold. Interest isn't paid when you store your gold somewhere. both gold and bitcoins are hard to lend. Bitcoins even have deflation.
There are gold loan interest rates. Any valuable asset can be loaned for a rate in return. Gold is hard to loan because it can be forged. Bitcoin does not have this shortcoming. Gold is also indivisable, hard to spend for daily use, thus not suitable for use a money nowadays. But Bitcoin is a combination of gold and money. Anything you do with money can be done with Bitcoin.
In theory bitcon can be deposited in a bitcoin-bank with an interest rate. People may ask where does that interest come from since it's a deflationary currency. The answer is: as long as there's business going on, as long as there's investment and return going on, there can be bitcoin interest rate. In short the interest rate comes from the risk the invester takes (the bank being default, company going bankrupt...). In other words it comes from a successful business that is financed by the bitcoins lent. It comes from the bitcoins (or dollars or any other currencies) that the cusotmers spent on buying that services from THAT business.
The only thing preventing interest rate from happening is that bitcoin is not yet acknowledged by law as an asset, so it is hard to sue anyone if he doesn't return your bitcoin. Once it becomes a legal asset, I don't see why interest rate won't happen.
Looking into the future, there will be bitcoin bankers, and bitcoin-backed fiat. I can imagine that the technically versed may be able to manage their bitcoin asset on their one and potentially able to manage bitcoin assets for other people, and thus become bitcoin bankers. While the non-technical people who don't understand the technology enough thus cannot take the risk, will have to use bitcoin-backed fiat. This is similar to the ancient times, when the nobel class use gold, and the poor use coins minted by the king.