However, given real world experience in this community, such exchanges also have a nearly 100% chance of (a) getting DDoS'd and (b) getting attacked by determined, knowledgeable thieves.
Well, it would be quite similar to how mining pools work in terms of centralization. Some pool might be attacked, but that's barely a problem.
Note that thieves wouldn't gain much from a hack, so there is almost no incentive to do that.
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That is why decentralized, open-review systems are preferred.
I think it's unlikely that full p2p system can be as fast as semi-centralized (federated) one. I.e. daytraders won't like it.
But it would be cool to have it as an option.
There's no reason not to use a fully p2p system. As an investor, daytrader, and one looking for development opportunities in the broker/dealer/exchange space, this is what I'd like to see. Between all the coloured coin/atomic coin swap discussion, and the distributed bond discussion I see - this is the most exciting development in bitcoin.
I think you're correct that most individual traders wouldn't want to use the basic p2p network and reference client, but there's an opportunity for both open source and commercial software (clients, analysis tools, discovery tools) development for these users, as well as exchanges/brokers.
Most users trading bitcoin for fiat money today don't prefer peer to peer solutions, like bitcion-otc, they prefer to use more centralized services (mtgox, bitinstant, etc) The OTC market can flourish alongside semi-centralized markets. Having a purely peer to peer system as the underlying assures an equal barrier to entry for exchanges & individuals, as well as assuring the transferability of assets, and decreasing the overall counterparty trust requirements of transactions not supervised by a central authority.
