I think that if Bitcoin is going to succeed it will be because of bank-like institutions using Bitcoin as the underlying protocol that the average consumer doesn't interact with -- but could if they want to, so this is a fantastic first step. At present money in the bank is not "money" "in" the "bank", it's an entry in a database that is reconciled every so often, Bitcoin should be used in a similar way for it to be compatible with current consumer behaviours -- expectations of protections against fraud (chargebacks), human error etc.
It's the only way Bitcoin can scale to major-currency levels, since every on-chain transaction is seen by every full peer.
If you have a bunch of "banks" who provide checking accounts, they can use on-chain transactions just for periodic settlements. "In the past day you sent me checks worth 10,000 bitcoins, and I sent you checks worth 11,000 million bitcoins, so now I'm sending you 1000 bitcoins."
