Except you're susceptible to physical robbery unless you store your money in a bank with FDIC protection. This is one reason Satoshi chooses to remain anonymous.
With bitcoin, you don't need a bank. I have a 24-word passphrase in my head that can be converted to my private key—a "brainwallet". I know it, and my parents do. It's not written down or stored anywhere. It simply isn't physical.
With those 24 words, you can unlock all of the value I have stored in bitcoin.
It's utterly amazing.
If someone holds a gun to my head, I would give them my passphrase. I’d also go into my bank and wire my money into their account. In both scenarios, my money is gone forever.
Maybe someday, someone will invent a store of value that is safe, even if someone is threatening to kill you.
Most people don't walk around with their life savings on them. That is exactly what you're doing by storing your life savings in your brainwallet. Hence, the need for banks.
Bitcoin mixers also make it an attractive avenue for robbers. No one can demand you wire them money without getting caught. But they can demand you give them your passphrase and then make your money disappear in an untraceable way.
I’d suggest reading up on multisignature transactions and bitcoin, which is an even safer way to store bitcoin than I’ve mentioned: http://bitcoinmagazine.com/11108/multisig-future-bitcoin/
We simply disagree on the value of bitcoin.
Most consumers will take risks like these seriously. If Bitcoin is going to go mainstream, it needs to address these concerns.
No one is going to strap a bomb onto you and then force you to wire them money. Remember, if someone were to do that, they would be caught immediately, because it's very easy to trace money transfers from banks. But Bitcoin makes tracing money impossible, thanks to mixers. That's why banks are safer than Bitcoin: A robber can't extract money from a bank without getting caught, but a robber can empty your brainwallet in a way that hides where the money has gone.
As for holding a loved one hostage, kidnapping for money hasn't worked for a long time. The failure rate for kidnappers demanding money is around 100% in the US. But kidnapping will become much more lucrative if Bitcoin catches on in the way you're imagining. It needs consumer protections.
Once bitcoin has consumer protections, it will be very valuable. That's why I'm advocating the protections. It's a necessary step in Bitcoin's development.
EDIT: To put it another way, instances of kidnapping and theft are rare because the current system defends against them, not because they're inherently rare. If bitcoin catches on without protections afforded by banks, then kidnapping and theft will likely become more common, because those tactics will be lucrative again.
It's become a much more dangerous world, just by the mere existence of Bitcoin.