Sure, the internal system of IOUs sounds like fastest and easiest solution, but what you're missing is they still need to send the physical cash and redistribute the funds adequately to all the agents to regulate the balance. So it is actually more complex and likely far more expensive.
Using BTC as transfer tool, the whole process is completed when the recipient gets the money. With the IOU system - it's not.
Also, internal system means single point of failure. I haven't use WU much, just few times in my life, but happened to me on 2 occasions when agents refused to take the order because 'system was down'.
transferring money would still be necessary as the agents that receive cash fiat will need to deposit the funds to the bank to replenish their exchange account while the agents disbursing the cash will need to sell bitcoin and withdraw to their bank account in order to replenish their cash on hand. This will cause additional costs as customers will need to pay for the costs associated with the same transporting of cash plus the exchange spreads/trading fees that the agents incur