2. Using bitcoin in offline locations is very problematic technically. If you go to buy lunch, they don't want to wait for 10 minutes until your transaction confirms.
Waiting for 1 confirmation is safe enough for the real world. If you're caught double spending, there's no way to pass it off as an accident, mistake or anything but premediated fraud, and it's so hard to pull off it's less risky to just shoplift. And aside from that you got MtGox codes and the Instawallet green address.
They don't either want to check the market price all the time and adjust their prices, which, as opposed to online shops can be printed on papers and boards. Do you reprint them all the time then?
Modern (as in a few weeks old and newer) Bitcoin offline merchant solutions adjust prices automatically. There are people working on this - see
bit-pay.comAs for cash, I hate coins. If people were decent enough to include sales tax in the price of the product and make all the prices end in multiples of .25 (even .49 and .99 are acceptable) it would be different, but most stores don't do that. That's reason enough to use Bitcoin for me.