How would these "fiat cryptocurrencies" be any different than what we have today, other than offering cheaper or more convenient payments?
That's kind of the point. Bitcoin, IMO, is valuable precisely because it is a better solution than the current infrastructure in making cheaper and more convenient payments. It's a better solution to that worldwide trillion-dollar problem. That's the whole reason I identified it as having economic value in the first place.
In the long run, I expect that nations which issue fiat currencies will co-opt the technology for that purpose and that purpose only, changing nothing else about their control of the monetary system.
Bitcoin's fiscal policy is set in concrete from the outset. There is no possibility of responding to an economic disaster - no way to damp a boom before it goes bust, and no way to nurse an economy through a bust without going all the way to the bottom and a complete economic collapse. The fact that that's *BETTER* monetary policy than some of these kleptocracies provide is nothing short of an indictment, because nations can certainly do better than that (and many do) if they are smart about it.
Others may identify Bitcoin's value as taking monetary control from governments -- but that's only a valid point to the extent that governments do it extraordinarily badly (places like Greenland, Greece, Cyprus, and Argentina to mention a few of the worst offenders). I don't believe that Bitcoin's economic value derives from that source (although its ideological value might).
Governments that implement fiscal policy well can and do provide economic stability that I wouldn't expect to see in a purely Bitcoin-denominated economy where regulation of the money supply is impossible. The USA was very slow to wake up and realize the extent of the economic problem its failure to enforce lending laws had caused, but once the disaster was in full swing, it actually did a damn good job of responding and limiting the economic damage.
Quantitative Easing, for a nation, is sort of like violence; It can be the best option, but only when you've already made some serious mistakes. It's also sort of like violence in that if you rely on it more than you absolutely must, your life is likely to be nasty, brutish, and short. But in a situation where the mistakes had been made and there was no better option than that very bad one, The Fed was able to understand, analyze, and respond. The 'dead hand on the tiller' approach of Bitcoin could not have been made to do so.
The complete absence of economic controls might give a Bitcoin based economy essentially the (different) problems of the old gold economies, which featured huge year-to-year price fluctuations and deep boom-bust business cycles about seven years long, which economies with effective fiscal controls mostly mitigate and could at least in principle avoid.
Active mismanagement, however can make such boom-bust cycles both longer and worse, as we have seen.
Even that would be a win for bitcoin by forcing other currencies to compete with its payment system.
It would be a win for the citizens, because they'd have the ability to make cheap transfers of money. It would be a win for the governments, because costs associated with transfers are a pure drag on the economy. It would be ideologically a win (though perhaps a pyrrhic victory) for Bitcoin advocates, but not financially a win for Bitcoin holders.
If you want a vision with both ideological and economic wins, consider this. I think that a Bitcoin-like currency taking advantage of some other aspects of blockchain technology could very actively limit fraud and create an environment that would make it virtually impossible to misrepresent the performance of public companies, derivatives, or portfolios. An extension, perhaps, of what you're calling "programmable money." -- a powerful idea that hasn't yet had a chance to demonstrate its strengths. That would be an even bigger win - for everybody. But the people who misrepresent those things enjoy their financial winnings, are very very powerful, and will fight it tooth and nail.