This, right here, folks, is why bitcoins will fail. Because everyone with a small stack throws their money at some of the worst ideas on the planet, and most people with an ounce of sense wouldn't even bother.
I totally disagree with you. I think casascius physical bitcoins is one of the
best ideas. I've bought a bunch of the 1btc coins to give out to people. This is one of the best conversation starter and helps spread the word about bitcoin.
If you do not trust Mike, you don't have to purchase his 1000 btc coins. But I think a 1oz gold coin with 1000 btc in it is a very cool concept. It makes you think about the definition of value. Does the gold have intrinsic value? Do the embeded bitcoins have intrinsic value? In a hundred years, will this coin be just a plain 1oz gold coin with a pretty hologram and a cryptic string in it? Or would this be a highly sought after collectible worth a lot of money due to the embedded bitcoins?