As much as I like the 2girls1coin video, this product does not have a place in the market. PayPal barely scratched the surface of retail with millions of invested dollars. Credit cards are the IPv4 of retail, the industry workhorse that's always "just about" to be replaced.
It has a place in the market to the extent that people are using Bitcoins. If Bitcoin doesn't have a place in the market, then your statement is correct.
Your comparison with Paypal isn't quite valid. The Bitpay solution is more like a way for a bar to accept euros or yen, and will be in demand to the extent that euros or yen (or Bitcoins) are present in the economy.
And credit cards, as a medium (a plastic rectangle piece in your wallet) will be gone soon. See Google Wallet.
The comparison with PayPal is entirely relevant: here we have a massive company with 100 million of active customers and 70 billion annual turnover. They could easily build a mobile application that enables the bar to accept euros or yens from the user's PayPal account. Such an application would be thousands of times more interesting to the bar than Bit-Pay mobile, since thousands times more people have non-zero PayPal accounts than bitcoin balances. Yet what does PayPal do ? They issue their own credit card - they want a piece of the credit card action ! That's because even for PayPal the network effect is too faint for retailers to bother implementing their system.
Online and e-commerce is where ecurrency works. If it succeeds there, maybe, just maybe there's a chance in the retail world, but this product does not have, at the moment, any place in the market.
As for credit cards going away, let's not get ahead of ourselves. The physical aspect changed from carbon copy to magstripe to chip and now to NFC. But the same old credit card cartel gets to steal 3% of your purchase, represented by MasterCard in the case of Google Wallet.