So, in other words, build in all the parts of the modern banking system into crypto, which was specifically designed to be decentralized without a single arbiter of the correctness of transactions. Talk about the worst of all possible worlds...

At the end of the day, there is a fundamental judgement call when it comes to disputes: was the product "substantially not as described"? who has better evidence? etc. Once you put an arbiter in the middle, making this decision (which, again, I argue is an essential point of the modern financial system) the entire raison d'etre of crypto goes away.