Funnily enough you can use Bitcoin at most merchants that use a Square PoS device, which is like 25% of merchants in the US. It just takes time for folks to change their behaviors. And why would they, if they're getting X% cashback on all purchases using their credit cards?
The other thing about Bitcoin is that it's deflationary, which leads to people holding the currency rather than spending it, as predicted by Econ 101.