Bitcoin itself I dont think has gone wrong- and I will probably get a lot of flack here- but IMO the users are killing the currency.
Why? Because people who genuinely want to deal with bit-coins for their business get spat on and frowned at by the bitcoin community until they basically give up. I tried to sell a house last year for a client in bitcoin on the bitcoin talk forum- the moment I listed it had 'scammmm!' screaming from the rafters. So I just sold it on ebay to someone instead. Then the Bitcoins skyrocketed- So I thought why not try again. I was 'lolled' out of the forum being told that now bitcoins were far to valuable for the likes of property purchases.......so the bitcoins took a massive crash, I decided to give it a final push and accept bitcoin on my property purchases one last time, and there isn't even a hint of interest in the forums whatsoever. Did the bitcoin community kill itself with it's Arty zim level of smugness or something? From the outside looking in, it seems bitcoin is like that mythical girl who is so smoking hot, that she never thinks any guy is good enough until one day she is old ugly and realises she is going to die alone.....if you guys won't allow businesses to come into your community and start trying to actually deal with your currency for real world items then the only thing bitcoin is going to attract is scam artists. Sorry if I get a load of Neg replies on this but thats how it seems, and I'm waiting to be proved wrong.
Buying a house is still considered too risky with bitcoin. From risk management point of view, you net worth must be 5-10 houses to spend some coin to buy 1 house, so that you risk exposure is not too high. There is no real good insurance for large bitcoin purchase, if the coins are gone and you deny the trade, there is no way to protect the buyer