The reason people initially thought bitcoin would make banks obsolete was because you could have your wallet on your computer, which meant you didn't need to store it in the bank. But the blockchain has become so huge that most people arn't able to have their wallets on their computers, they hold them online in services like Coinbase. And this is where the banks can step in and offer wallet services - for a fee.
Why would people pay a fee for a service which coinbase offer for free ? Also we do not need to store the whole blockchain database on our computers. We can store the bitcoins in desktop wallets like Electrum Bitcoin Wallet. It is way better and cheaper to store bitcoins in desktop / hardware wallets then to store them in online wallets or banks in future.