But nowhere does it demand that you conduct these 
  transactions in USD. 

What alternative are you suggesting? It seems like no one's actually transacting in Cryptocoins, as evident with an ideal usecase failing; Bitcoin proved a failure among technically competent users attempting to buy digital goods though Steam [1]. Stripe also determined Bitcoin to be an unreliable method for payments [2].

  USD ends up getting used because it's 
  convenient

Exactly.

Why would anyone bother taking their money, going through all the steps to convert it into the foreign currency or software tokens that they need to buy from someone else (who's siphoning wealth from you) just to find out merchants don't even accept it due to the volatility. And what happens when the merchant turns out to be a fraud? No customer protection by design.

[1] https://steamcommunity.com/games/593110/announcements/detail...

[2] https://stripe.com/blog/ending-bitcoin-support