I agree with you there, and I'm not one who would argue that bitcoin is ever going to surpass fiat currency.  Ever.  Not unless people start getting their paychecks in bitcoin and items are priced in terms of bitcoin--and neither of those things shows any sign of happening.

But here's the thing: bitcoin could be used as money if you needed to use it as such.  Thus, even if you're an investor it has that added value.  If you're tired of hanging on to it, you could always spend it.  There are plenty of merchants that sell some pretty interesting stuff for bitcoin, and big merchants at that.  Overstock and Newegg are two that come to mind.  I don't think the fact that bitcoin is mostly a thing that gets traded instead of spent has much effect on its importance or utility.

Ultimately, bitcoin doesn't need to replace any established payment methods or currencies.  It can peacefully (and profitably) co-exist alongside all the rest of them.  I never saw it as being in competition with fiat.