>> 1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf. > This point may prove to be very sticky. It might be solvable with smart contracts...

Shouldn't be that hard, even using just the features available in Bitcoin today. You'd need a 2-of-2 multisignature wallet for each account holder, with one key held by Coinbase and the other by the user. When the user wants to spend some coins, he or she signs a transaction which Coinbase prepares and counter-signs; neither the user nor Coinbase—or an attacker with access to Coinbase's keys—can transfer the funds unilaterally.

The only thing missing is a convenient UI.