This is a false dichotomy. Bitcoin is a useful protocol for other things besides consumer payments. It is also possible that even if Coinbase's value proposition is 99% as an exchange, there may still be some value to its users in providing a convenient device for extracting $ from their btc balances. Someday I could see Coinbase as a sort of wrapper around multi-currency wallets. Users may have btc, ltc, $, and various other digital assets which they (stupidly or not) wish to leave in one repository.