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Ignoring the issues of infrastructure i.e. who controls the servers controls the money supply and other hacking issues the fundamental problem with bitcoin is its finite supply. If we assume a growing economy then a money supply that does not increase in sync results in the value of goods and services declining because more goods are chasing the same amount of money. This leads to a decline in prices and which is bad for profits, investments and eventually general spending as people will hoard money in the hopes of getting a better deal tomorrow.
I suppose you could fix this problem by adding new denominations to the bitcoin currency but then if you keep expanding the money supply you just get the same issues that come with other fiat currencies.
The important point to grasp is that people often think that price stability comes from a fixed money supply but really fixed prices come when the money supply matches the size of the economy relatively speaking. If money supply grows faster than the economy you get inflation and if the economy grows greater than money supply you get deflation.
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