For an enthusiast at my level, this is really an interesting idea.  I want bitcoins but I'm not trying to trade on the exchanges with them.  I don't want to go through the hassle and expense of setting up an account on an exchange.  I don't want a million BTC, just 5 or 10; enough to have in case somebody actually sells a service I can use them with.

A central supplier of BitBills will gain a reputation and using that, I can evaluate risk.  My risk is limited to the time period between sending the cash and verifying the content of the bill.  As soon as I have the coins, I can transfer them to a different wallet and they'd be out of the control of issuing authority.  I'd be willing to pay a commission for that.