Because BTC lives off of hype and speculation ... or in your words, "pump and dumps." Most BTC traders buy on rumors and sell on news (china bans, FBI silk road coins), so basically we're all part of a huge pump and dump group. BTC is not a viable currency that can replace fiat. But maybe other cryptocurrency in the future can with the proper structure, and that is another reason why we speculate on alt coins, we are looking for the next crypto to replace ltc and perhaps btc in the future, and of course profit.