At first i would say, i dont trust everyone on the net. Bank of bitcoin is means centralized currency, and no one can guarantee it will be fine using it
look at what Coinbase is doing and you will understand how bad Banks can be. We should never trust third party since we can not fully control our money. Moreover, they can easily turn into scammers if they want to. Therefore, Bitcoin is created for the good purposes, for the anonymity and the security. Banks will destroy all these featuresThere can be a group of escrow that control the bitcoins but then you won't be able to pay users interest as you can't lend them which actually is what banks do to generate revenue with funds.
Why would government (read tax payers) want to cover your losses?
If a bank goes bust while its deposits are insured, you will receive your money back within s short period of time. When one of the banks in which I had a deposit account went belly up in the past, I received the deposit (with all outstanding interest) in about two weeks. But that doesn't mean that if someone steals money from your account due to your own negligence (e.g. by getting your account password or something like that), no one is ever going to compensate your losses. Otherwise, everyone and his dog would be stealing money from each other and then got reimbursed by the bank or government (tax payers)
Well he probably meant that if a bank was attacked by a hacker or it was bankrupt they will refund you since they have an insurance. But the insurance does have its limitations and if you have a large sum in your account not everything will be refunded. To make it simple we can just require and oblige the web wallet hosts to apply for an insurance so that when they go bankrupt or attacked by a hacker they can refund our bitcoins.
And that's the reason why bitcoin is used in the black market. Even if they are doing something illegal, it's alright because it's relatively hard to trace you. On the other hand, if a fraud or a scam happens, you can't do anything about it. Some people prefer doing transactions in this place because there's the trust rating. A hero member will not ruin his account for something much lower than the cost of his account.