I think Bitwala is trying to bring crypto newbies into the system.Most newbies would prefer to store their coins with a safe custodian till they're able to learn the ropes themselves.
that was my first thought as well. it would be something for the noobs probably helping them to transition from pure banking to crypto experiments.
but anyone who is into bitcoin for other reasons would find a better way to manage his crypto funds.
even when cashing out a bitcoin atm would be easier and more private. i am not convinced either. but maybe it is good to have it instead of not.