This is a great analysis. The lack of trust as a feature in cryptocurrency is really a bug in society.

Bitcoin rose out of the previous financial collapse by appealing to people who have lost trust in institutions. The problem with building a trustless answer to that problem is that (assertions ahead) life isn't compatible with an absence of trust.

Trying to build a trustless financial system is a quixotic undertaking at best. It really smacks of a utopian dream where fundamental aspects of human nature are blithely ignored.

Of course, as you point out, no one is really trying to do it. Most people will have to trust Coinbase or whichever exchange they choose.