The problem, as others have pointed out, is road design and driver attitudes. Going any significant distance involves either riding (legally) on footpaths, or riding in traffic. There's a nice bicycle path along the river, plus some pictures of bikes in doorzones. That's about it for central Brisbane. It's not that hilly but it's definitely not flat. I don't mind riding in traffic, but I say that as a bike racer (albeit an old, fat bike racer) who used to be a courier. Driver attitudes, well, 95% of them are fine, maybe more. There's a small minority who are deranged and vicious and it's socially acceptable to behave that way in a car. It's all do-able, but it needs some unintuitive techniques (ride in the middle of the road in some situations, for example) and, ideally, a bit of fitness. I don't know as I'd recommend it to neophytes.
That helmet laws are the problem is an appealing conclusion, because it's a quick fix: repeal the helmet law. Changing infrastructure OTOH is hard and changing attitudes in harder still. I'd like it to be as simple as repealing a law, especially one where the benefits are so unclear. I just don't think it is.
In terms of the popularity of the bike hire scheme, I can only say that there are a couple of dozen hire bikes out the front of my workplace at the start of the day and it's down to a couple by day's end. I'm not aware of the official figures, but my highly subjective impression is that they're getting used more than when it started. A less convoluted signup process probably has something to do with it, plus the fact that it's a pleasant time of year to cycle.