This is like saying in the middle ages: "Democracy? An elected king whose actions can be punished by the population? Not going to happen"
You seem to think that there is such a thing as democracy or fair elections, direct representation and so on. It does not, and never was. "Punished"? When did that ever happen? And no, I don't mean small things like stealing a few millions or doing miss Lewinski... I mean people who did real damage to their country or to the world. Those who were punished (and that's already a small percentage), got punished through revolutions, which are pretty undemocratic.
I'm not particularly happy how democracy works today, I was just pointing out that is better than we had in previous times and that hasn't happen because the governments wanted it. The punishment I'm talking about is just not being elected again. For that punishment to be applied the public has to be informed (a questionable assumption) and it has to be possible for new political real alternatives to take power(another questionable assumption under western two-party systems).
Again, I was just saying that the fact that is not desirable for the government doesn't means is not going to happen. There can be pressures from the population big enough to make it unavoidable.
Certainly they would be better than with the Euro.
I completely agree with everything you said. I just don't think it's going to happen via "people wants > government provides". I find it much more probable that a private corporation will launch something like "backed bitcoins" and it will grow up to the point that it will simply replace the traditional banking system.
Sure, there's many uses for backed coins (USDcoin, EURcoin, etc) and it's likely that they will appear in a private form.
Also, I agree with freequant that this would be an opportunity for a small country. Just to attract more buyer to its currency and more innovation to the country.