It wouldn't be terrible at all, as we'd extend the blockchain age to what all blockchain ventures really requires. But we cannot put aside the mainstream economy, as all of these projects on a high level more or less depend on it, as if it was impossible to trade it for the fiat i doubt that anyone would be using crypto. Hopefully in the future all these economies can coexist together and make the world a better place to live in.
It wouldn't affect economically but it is needless. Diversity is fine and all, but too much of something is too bad. And if everyone has their own type of cryptocurrency then their money won't be worth anything at all. It can't be used for purchases, trades are gonna be much harder. And the economy of the cryptocurrdncy world will saturate. Leading to adverse effects on leading coins in the market. So it's fine that we have numerous coins to choose from, but not to the point where everyone has their own cryptocurrency.