As the saying goes in the community, "Not your keys, not your coins", you're not supposed to store coins on an exchange. But nearly everyone does. Everyone is encouraged to hold their own keys and be responsible for their coins. As UX and wallets improve more and more people are holding their own coins. The people that store coins on exchanges must understand the risk of holding coins on exchanges. It's a reality of crypto.
It's true, current iterations of DEX are not really DEX, they are all centralized companies, these things take time to build, it's not a simple photo-sharing app. If it turns out that is impossible to build a true DEX then you can always do shapeshift style atomic swaps and those are here today!
Bitcoin hacks and scams are not related to Bitcoin. There are even more hacks and scams that happen in the regular finance industry. From SWIFT being hacked to countless and countless of scams by small and big companies. Are you seriously saying that Bitcoin only suffers from scams??
The difference between a Bitcoin bank failing and regular bank failing is that, if Bitcoin bank fails, for people who have stored their coins safely won't be affected. Sure the price will fluctuate because of the news but I still have my coins.
When a regular bank fails the entire country has to pay the price and money is printed and currency is debased. Everyone has to pay for the mistake of a few.