@Devonian
"Friction" is good in that it slows things down and provides more ability to detect and counteract fraud. This is a service, conducted by an intermediary that is trustworthy and reputable, and it costs money.
More-or-less *nobody* is going to make the effort to safeguard their own wealth in "multiple wallets with independent access points" in order to save transaction costs. People are terrible at security. Their passwords and PIN numbers are a joke. Some people might try it, but given the average person's inability to keep anything secure, the ratio of "people trying it" to "horror stories about drained wallets" will be sufficient to ward the masses off.
The real security is in the institutions where the money is stored and transacted, the very banks, credit card, and paypal services you're trying to cut out. They're the ones that add the friction to the system to keep things from going instantaneously shitwards even though your password is "ABC123". And that costs money. Price might be a bit steep, but it seems to be worth it, in that people do pay it and Paypal doesn't quite own the world.
Anyway, without institutions to detect and prevent theft, there will never be a critical mass of bitcoin users sufficient enough to make it worthwhile for businesses to transact in it.
Now, if banks *totally took a shit and fucked things up even worse than bitcoin*, then maybe. But they're not quite that incompetent.
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