When will people finally learn that since Bitcoin is decentralized by nature, that there is no need to re-invent these online "banks" to store coins?
Serves them right.
I hope I'm not making a crazy statement to say that people in general aren't that great at security. Unless you have the wisdom to keep your wallets offline or secured with a password longer than 20+ (or whatever) charactes, it's only a matter of time before a worm or virus gathers up hundreds of insecure wallets.
Secondly, there's nothing intrinsically wrong with banks. Banks help the supply of money and keep economies going through investment. Banks can build green addresses for instant purchases which Bitcoin needs to be successful.
Bitcoin wasn't designed to get rid of banks. Bitcoin was designed to give banks and people a common way of transferring money without expensive accounting auditing, secret protocols, and government centralization.
Just use online wallets as your hot wallet and keep most your coins offline.
If you're worried it can disappear in a fire you can always make a copy of it put it on another USB stick and give it to your grandma or other trusted person.
If you are paranoid you can always just encrypt the file before saving it on the USB stick.
Treating them like the keys to your house should offer more security than any bank can give you. For one thing it makes it less profitable for any thief to target you.
There's only 1 problem with this. You should always check the computer you're about to load your wallet file into for malicious software.
Although I would argue a live CD with a Linux distro would probably be the best choice in this case. Quickly transfer some funds to your regular use account if you need while keeping the bulk of your funds in a safe place.
I would not trust a bank with my bitcoins.
This means two things. One, there exists real demand for a secure online wallet, because just like most people are not comfortable storing massive amounts of cash at home, they are not comfortable storing Bitcoin in their paper wallets, brain wallets, etc. There is the convenience factor, as well.
Two, online wallets entail a number of risks, and seem inherently unsafe.
How do you reconcile the two?
It's that simple to do cold storage. Do it from an offline live CD boot, save the file to USB, and print it on a piece of paper just to be safe. So much confusion around something which is essentially protecting a string of text.