1. Every altcoin has to invariably be pegged to bitcoin. So its fate is in some way tied to bitcoin. Until you have a coin big enough to exist independently and traded with USD, you are not going any where.
Not really, there are some coins that have direct fiat exchanging.
I'm not naming them though because I want to invest more in them first
2. Lack of market. Some altcoins have their own "markets" but they are just convoluted implementations for any retail business to even look at. Then there are some who completely forget about that and think anonymity or some new mining algo is the way out. It isnt. Bitcoin took ages to reach even this stage of acceptance, so unless you have a great marketing plan or an idiot proof way to get retailers on your platform, forget about killing bitcoin.
You're right, but eventually Bitcoin will kill itself.. the endgame is failure (for a variety of reasons already covered all over these forums).
Which will result in other coins taking over.