While that may work in practice, it's highly ironic. I use my fiat to buy Bitcoin, then I purchase your product using Bitcoin, then you sell your Bitcoin to earn fiat. What's the point of Bitcoin in the first place? Isn't it unnecessary? Why would merchants accept Bitcoin as a payment method if they don't insist on its main purpose/philosophy?
It was created to prevent the requirement for a financial institution. Not to add an extra layer around it.
You're right, but unfortunately I don't see a better way. As long as every country will ask for taxes to be paid in their own currency I expect that merchants of that country will prefer that currency. This makes Bitcoin only work as a "foreign" currency everywhere. And for such currency a conversion (i.e. an extra operation/layer) is the way to go.
The fact that you'll use this rather awkward workflow with most merchants doesn't stop you use Bitcoin directly where it's accepted, for example to pay overseas people for their work over the internet.
and even the media
Although the virus analogy is interesting, I think that media (and greed) have for now more effect than "infected" people spreading the word.