I think that you are letting an aspect of bit coins pass you by. Because of the rigid quantity of bitcoins, the more success it finds the less it will circulate. It's a deflationary currency, the more widely accepted it becomes the less of it will circulate. People will choose to hold bitcoins speculatively (you could argue this is pretty much the case already) rather than use them for casual transaction. I don't recall who's theory this is, but it's basic monetary theory. When there are two forms of currency people will horde the one that is more sound. A deflationary currency is always going to hold it's value better than an inflationary currency so people would always choose to hold their cash holdings in bit coins and spend USD or whatever else they use. I think this is going to be a problem for bit coins.
You may be referring to Gresham's Law. When there are two kinds of currency which are required by law to be honored at the same value people will prefer to spend the one that is perceived as inferior. Just like I spend a wrinkled old dollar bill first, people would spend a coin that had been clipped or sweated before a mint coin. When coins containing precious metals were replaced with coins made of base metal, but by law they had the same value, people hoarded the old coins. This does not occur if the relative price of the two currencies is allowed to float. Old silver coins are now worth more than their face value, and people do sell them. People may expect their bitcoin holdings to rise in value relative to other currencies because of the capped future supply, giving them reason to hold them. But if most people feel that way, it will drive the price of bitcoin up, giving people a reason to spend bitcoin. This is no bigger a problem for bitcoin than it is for any other commodity: classic cars, Picasso paintings, gold. The advantage of bitcoin over old Corvettes is that it is (practically) infinitely divisible.