then the accepting business must turn around and sell those Bitcoin in order get fiat currency to pay the electric bill. This is completely inefficient.
There are goods and services in which the best (or only) payment method is bitcoins. If you are doing market research on your competitors, you might want to use an anonymous VPN, for instance. You would want to pay using a digital currency that can be used anonymously then.
Other times bitcoin is the only payment method the seller accepts. Expect this to become more common as merchants in certain categories realize they can ditch their high risk merchant accounts:
So in these instances, a merchant will acquire bitcoins just like a consumer does -- using cash deposit at 7-11, or a bank transfer (e.g., through Dwolla).
It takes time for a payment method to gain traction and without Bitcoin being a corporation (e.g., no marketing budget, no 1-800 # for support, etc.) it will take longer than many of us would like, but it also is unlike any other payment system.
There is no payment system that technically works in every single country in the world en Español? Si Habla. As well as German, Portugese, Chinese, yes even Greek!
There is no widely accepted payment system that can be used anonymously.
There is no payment system that is technology agnostic. Want to send a bitcoin to someone through e-mail? Coinapult, Blockchain.info, and others will do that. How about to a mobile? Several options for that as well. Physical (offline) method/ Check. Escrow? Check (well, someday -- use a third party until that happens.)
So yes, while a merchant that accepts bitcoins might be leaving money on the table by cashing out, they are already half-way there to being prepared for when the goods and services they buy can be paid for using bitcoins.
That will happen.
The reasons pointed out in this Bitcoin Business Primer will help to explain why Bitcoin is better: