Decent article with some good points, but many misguided thoughts in my humble opinion. Gold is actually a pretty close comparable. It would drop dramatically if people didn't use as a store for value. Its industrial uses don't require large quantities and value in jewelry is reflective of the fact that people use it as a store for value.
Pricing can be automatic based on current exchange rate price.
As you mentioned, there has been massive fraud even in regulated exchanges. You mentioned Martha Stewart, but what about LIBOR fixing scandal? Also the tactics used by hackers don't work if you don't overreact to price changes.
Botnets will exist whether or not bitcoins exist. They will be used for nefarious purposes either way. Them mining bitcoins is probably one of the more benign uses.
Criminals already currently break into your computer to collect personal information from your credit card purchases. With bitcoins, they won't be able to do that and you can store your bitcoins in an offline wallet and only transfer the bitcoins needed for purchase onto an online wallet. More services will continue to grow as bitcoin becomes more popular.