Well, yes. There are huge network effects for stablecoins.
Let's go for a more specific example. Let's say that you hold one bitcoin on Binance, and you believe the price of bitcoin will go down today. You would like to exchange your bitcoin for dollars, and then tomorrow, exchange your dollars back into bitcoin.
Ideally you would just use plain old US dollars. But since it's crypto, you can't. What you can have is a stablecoin.
So which stablecoin should you use? There are two costs to using a stablecoin.
Cost #1 is that when you exchange, you won't get the perfect rate. You'll have to pay some fee, and the precise exchange rate you get will depend on the liquidity of the market.
Cost #2 is the chance that this stablecoin collapses in value while you're using it.
For Tether, in my opinion cost #2 is high. All these dubious stories about the underpinning of Tether are true. That means the risk it collapses tomorrow are higher than the risks that other stablecoins collapse tomorrow.
However, cost #1 is probably lower for Tether than it is for any other stablecoin. Because there are more traders operating in Tether, you get a better exchange rate.
This is why Tether isn't just hype, it is providing real value to people through being the most popular stablecoin.
Would we be better off in a world where the most popular stablecoin also had a solid financial backing? Yeah, I think so. But that isn't the same as saying that Tether has no utility today.