I think the banks are pretty focused on offering competitive products that are packaged together neatly to avoid putting too much of burden on consumers (what's the diff between choosing a bank or choosing a private transaction-insurance service?).

I'm paranoid of investment banks but I think plain old banks are benign. You put a certain amount of money in your account and they handle all this for you. There is usually no charge for checking. Credit cards don't charge interest unless you go into debt, etc.

I don't think lack of competition is so much an issue, it seems that the Bitcoin movement just has a fundamental distrust of govt/corporations. I think if Bitcoin money didn't magically appreciate in value so much it wouldn't be much cheaper than banking except for big international money transfers.