I think we've been back and forth on this before. I contend that a service like Coinbase, while obviously not a theoretically ideal user-onboarding platform due to centralization of coins, is inevitable, and also a positive for the ecosystem at this point in time. Part of the necessity for bitcoin to become a powerful asset is user education. If Coinbase makes it easier for people to enter the ecosystem, thus triggering a desire to learn more, then that's a good thing. Hopefully people will in fact learn enough to move most of their coins to cold storage, or a user-controls-2-keys vault solution (like Coinbase msig vault or BitGo's wallet), etc...
If users are simply never going to learn, Coinbase (and/or Circle) will neither help nor hurt. I lean towards it helping, though, as it does make it a lot easier for new casual users to obtain bitcoin. And some of them will likely become serious/knowledgeable users where they would've just ignored bitcoin without the easy initial channel.
Maybe that's too optimistic a viewpoint, but I don't see a realistic alternative.
I would classify Coinbase as building dual-use technology that can be employed as useful Bitcoin infrastructure, as well as weapons to attack Bitcoin.
Certainly they are using a substantial amount of funding to reduce the privacy of all Bitcoin users. (As a matter of fact, they explicitly declined to participate in the Open Bitcoin Privacy Project's wallet survey).
They are opening up liquidity pathways between central bank currencies, and at the same time are building the tools to tightly control who is allowed to use those pathways.
There are other startups which focus entirely on blockchain privacy destruction without providing any compensating benefit to Bitcoin users. Those startups are even worse than Coinbase.
Mostly I'd just like to see the enthusiasm tempered with a bit of appropriate skepticism.
Not everybody who pretends to be a friend actually is one.
