If we can't compete with credit cards then we'll be in trouble, at least in replacing fiat in physical shops, and I do think it is important that it happens if bitcoin is to become one coin.
I've found bitcoin to be faster than credit/debit card, and I've personally made over 50 bitcoin purchases. Anyone with bitcoins can confirm this for themselves right now by going to Gyft.com and purchasing an Amazon gift card. The BitPay receipt will say "PAID" and the gift card will be credited to your account and ready to spend nearly instantly. It is pretty slick.
If you are near Vancouver, come and test out bitcoin PoS at one of the many brick-and-mortar venues shown on coinmap!
Yeah I never understood how confirmation can be so slow when bitcoin has so much mining power. I mean it simply isn't logical if that power isn't used to make transactions faster.
Transaction propagation times and acceptance by the nodes' mem-pools have nothing to do with mining power. Transactions typically propagate extremely quickly and, from my experience, faster than credit card transactions.
Transaction propagation times are independent of network difficulty, which is dynamically adjusted so that block confirmation times target 10 minutes. But we don't even want really fast block confirmation times, due to orphaning risk and other network organization problems.