Since you only have to do transactions to put a balance on coinbase and then can spend it over multiple transactions, does that help scalability?
I firmly believe in keeping your own private keys but I think it's an acceptable cost to give up ownership of a small fraction of your bitcoins and trust coinbase so you can do a few everyday transactions.
I don't know where exactly to draw the line but it would be 0.5-10%. Obviously a lot less if you have a large amount of bitcoin.
Are those services good for the ecosystem in total? How does it all work? Who gets the processing fees from the merchants running the Point of Sale?
as far as scalability goes, there is probably some overall benefit because coinbase handles the fiat conversion in-house. so there are no on-chain transactions required past the initial deposit into your coinbase account. if they had to process it through eg bitpay, that wouldn't be true.
i prefer to be my own bank. i really don't like keeping
any BTC on exchanges---USD is justifiable while waiting to buy back in, plus it's FDIC insured. i wouldn't worry about the effect of your own transactions on scalability. i think users should just be rational and pay as little as possible. that's how bitcoin is supposed to work.
for now, their debit card seems pretty cheap: no transaction fees on domestic transactions
for a limited time and no conversion fees. that might change in the future and it might not be economical.