Erm, it isn't supposed to change/replace currency. Probably a lot better for it to stand together with currency as mode of payments.
For me, i do not think bitcoin can replace fiat totally, because when their are larger transactions to be processed, it takes hours or even a day, except you have to pay Higher fees to process your transaction.
I will love several suggestions below, to further enlighten and brighten my knowledge.
Erm, not sure but fees are made from exchanges. They are requested so that exchanges actually have a source of income to manage the equipment/servers/etc. they use to process transactions and the like. Now, if we use BTC as payment, a p2p format would probably be better with it having no need for fees (AFAIK) and being faster compared to exchanges when dealing with big transactions.