The sole reason people use bitcoins is to more easily transact dollars (or any currency) from one place to another.
No. It may have been the reason a while ago, but Cyprus (rise to $266) and China (rise to $1,200) prices rose because people started using bitcoin as a safe store of value, and as a hedge against other currencies and political situations. It's the same reason people and countries store gold. So while some of the price is due to using bitcoin as a money transfer mechanism, speculation and hedging are other major reasons too.