Here's my take on bitcoin after dwelling on the subject for several days.
The current version of bitcoin is a technical fix for a non-technical problem--that is, it is a stand-in for a trusted third party that settles transactions.
I think there are technical Achilles heel(s) of the current version of bitcoin, too. The current protocol takes about an hour to settle a transaction. Presumably, there's a way to solve that with a revision of the protocol. If the settlement time gets down to seconds, it really is a killer application. Second, the network is actually expensive to operate. There are thousands of computers cranking away 24/7 to keep it going.
I think bitcoin will have extreme difficulty competing with systems that rely on a trusted third party to settle transactions. In such systems--really just a 100% reserve bank--the operating costs can be tiny, and transactions can be settled instantly. For that reason, I'm currently skeptical about the value of bitcoin.
I think the lasting value of bitcoin will be to force people to think about money in a really concrete way, and this might spur some financial innovation and competition to the banking system. Plus, aspects of the protocol, like the public ledger system, are really completely ingenious.