Intersting read, and I agree with the whole "bitcoin resting on it's laurels" thing.

RE: crypto-fiat:

Isn't the market capital that you can safely store/transact in a blockchain only proportional to the power (difficulty) of the overall network?

How would a crypto-fiat survive? If any serious capital existed in it then it would make financial (if not ethical) sense to brute force hack the blockchain.

We all know fiat scheme operators like to run their games with minimal overheads, I can't see them investing in or evolving the network hardware too much.

Even if you couldn't extract any capital out of the system (due to traceability issues) it would still be a target for a competing government on the global stage.

I think a premined coin can never hold alot of capital for this reason.

But having said that: I can see SHA256 miners getting lured onto a fractional reserve blockchain for "perks". And agree with your general sentiment.