There will always be a strong tendency for early adopters to diversify out of bitcoins as they grow to dominate the portfolio.  People tend not to be comfortable putting all their eggs in one basket.  Even Gavin mentioned doing this during the last run up.

But lets assume wild success - Bitcoin grows to a total value of $10T (roughly gold's, or M2 in the US).  Say a quarter of the bitcoins ($2.5T worth) remain held by 500 die-hards, roughly evenly distributed, who refuse to ever sell.  As of March 2013 there were 1426 billionaires holding onto a total of $5.4T.  So Bitcoin will have grown the billionaire population by ~35%, and increased their overall net worth by just less than 50%.

Meh.  With a world GDP of ~$70T, a 2% annual savings (rough guess) on transaction fees, cash handling fees, bypassing of forex fees, lack of need for options to hedge FX risk, etc. due to Bitcoin adoption would pay this same $2.5T out to "society" in the form of savings every two years.

Note that this rough analysis ignores the fact that this rise of Bitcoin would probably bump some billionaires like Charlie Munger off the list

Argument appears to be thus:

1) Create a new monetary/banking system
2) Give a small group of people vast amounts of control
3)
4) World is saved by innovative idea completely unlike FRB/fiat.

(I know you did not make the point 4 implication, but it is certainly a common theme.)

I don't know if we're from different planets or if you have the blinders on for the sake bitcoin argument, but you stated under your own presumptions that 500 people now control value equal to a quarter of the world's gold supply--and you call "a small group of people having vast amounts of control" a hyperbole under this scenario? Is based on the caveat you added that they "refuse to ever sell"? Because that is pretty meaningless. Wall Street doesn't "sell" their dollars, they use them to make more dollars.

Does the dramatic draw to bitcoin essentially boil down to "you save visa/mc/forex fees"? It's fine if that is enough for you, but it most definitely does not address the topic--I would almost say it is a red herring.

One could argue that curve is superior on the other hand it is possible Bitcoin would have never got off the ground without a benefit to early adopters.  So technically superior but dead on arrival still loses out to "good enough" Bitcoin.

Bitcoin was a proof of concept.  It had never been done and the subsidy was only one tiny part.  My guess was simplicity.  One school of thinking is that the initial distribution matters very little.  Miners sell coins, trade them, lose them to thieves, buy goods with them.  All of that is secondary distribution.   

Bitcoin =/= Mining

Hell even with a perfect distribution, give every single human on the planet 1 BTC (as if this could be done decentralized) you would see disparity of Bitcoin wealth within a decade.   It just is human nature.  Some people can't hold only to money, others have a talent (either honestly or dishonestly) of aggregating fortunes in a small period of time.

If you reread my post you'll notice that my comparison was with our very own world and its current pool of billionaires.  As I said, wealth is already centralized to the extent that wild success of Bitcoin would just be a perturbation of the existing paradigm.  That Bitcoin might spawn a few more billionaires just doesn't keep me up at night.

I am glad you are frank about it.

I have a feeling that if you look at the entire ecosystem, then its not so much about the 'BitCoin' itself, but the BlockChain, then slowly the beauty reveals itself.

First is the confusion of the fungibility of BitCoin, and although for most transactions right now a BitCoin is a BitCoin is a BitCoin (Just like an oz of gold). That is about to change soon. Look at ColoredCoin, BitShares, MasterCoin.

When you couple this with the idea of a Distributed Identity (like KeyHoteeID, NameCoin) etc and all the other services being developed on top of it, you soon realize... its not so much about the Bit"Coin".

I agree with this. Now try to put yourself in a different character, that would hear about bitcoin for the first time tomorrow
That is 99% of the population.
Can you really beleive they will say "ok, 60% of the coins are already gone, but I'll be happy with 0.6x0.01"