Most people are not technically savvy enough to store their bitcoins themselves. Without a trusted, insured deposit institution, they'll lose their savings to trojans, social engineering, and computer failures. There may be regulatory difficulties in creating such a service down the line.
This argument is not true. Anybody can print a paper-wallet for storage of wealth from blockchian.info, if they know how to do it (which is simly the case of watching a 30sec youtube video. For spending money you can have some change in an e-wallet.).
Yes, blockchain.info is probably the best out there for now, but long term it might not be enough.
First of all, someone has to know that taking those steps is even necessary. I've made a special effort to convince the people I've introduced to bitcoin, but it's a hard sell.
Second, as malware becomes more sophisticated attackers may well gain the ability to capture a user's blockchain.info decryption key.
Down the line, as paper wallets become more common, burglars will learn to recognize them, and even they won't be safe if you live in a high-crime area and lack access to a vault.
There's also the risk that blockchain.info might be compromised, and the attacker could insert some malicious javascript to gain the coins that way.
You also completely ignored the possibility of phishing/social engineering.
Think about how many people are victims of identity theft as it is, then consider that bitcoin offer zero of the protections that existing financial institutions do. A lot of people don't even know how to create a secure password.
