Is it a sign of success that people keep holding bitcoins as a store of value rather than spending it or a failure at becoming widely use currency?
Are you saying there will always be demand for Bitcoin; without supply ? I don't think that is possible; because no one would want to hold onto their Bitcoin forever, and they would inevitably sell it eventually.
Even if other people hoard Bitcoin, the demand for it won't automatically diminish. As long as there is a soul that want to buy Bitcoin, the demand will always be there. Unless Bitcoin become worthless, Bitcoin will always have demand on the trading market, and i do not think that the supply will be cut off by those who hoard it. remember there is still block rewards and miners, from time to time, need to cash out in order to have budget for their mining maintenance.
Furthermore, Bitcoin still has the potential to become a primary currency in the future, and it is already widely used in various places where buying and selling is available. So, I think Bitcoin usage will be balanced; in terms of spending, and holding. Additionally, maybe future generations will use Bitcoin more for transactions, or spending; rather than just holding, right ?
It is more likely that Bitcoin will have more potential as an alternative currency. This is a world is governed by centralized institutions, and Bitcoin being decentralized by nature would have a very difficult challenge to be a primary currency.