What amazes me is that even after the recent stolen Bitcoin news, the prices have actually gone up. I'm still predicting that there will be a really major theft or attack against Bitcoin that will absolutely devastate it.
To date, there have been no successful attacks against the underlying Bitcoin protocol. There have been one or two serious client issues -- for example there was an incident a year ago where the latest version of the Bitcoin network software started creating blocks that older versions rejected. It was fixed in time, but if it hadn't there wouldn't have been hugely serious effects. All the miners would have been forced to upgrade. There was also an issue due to a buggy crypto implementation on Android that made some Bitcoin wallets vulnerable to theft.
It will be something stupid involving trust where nobody thought that another party would do something, but they will do it, and it will be devastating. Then everybody will cry and moan saying "Why didn't we protect against that?". Of course, I could be wrong, but I have no skin in this game so either way I'm not losing or gaining whether I'm right or wrong.
Again, there have been many problems with exchanges, service providers and outright fraud that have been related to Bitcoin, but these have all been problems with entities having poor security, and not being careful with how they integrate Bitcoin with their systems, not problems with Bitcoin itself. Those events would not have changed at all, if you had replaced Bitcoin with fiat in their operations.
If Bitcoin fails, it will be because it is regulated out of existence (which will be hard -- it is more likely to just be driven underground) or because it is deliberately attacked by a player with huge amounts of money to do so. Such an attack would likely be a government or group of "big money" interests willing to spend hundreds of millions of dollars in hardware to attack the block chain through mining.
