"Consider the current system of government fiat and credit: the US dollar requires vast armies and navies, the vast and expanding Federal Reserve apparatus with its system of member/franchised banks, employees of the IRS, the US Treasury, the Secret Service (I'm redundant, I know). Millions of people are dedicated to propping up the "full faith and credit"."

Let's set aside the issue of whether or not the military is needed for the dollar to remain valuable and speak strictly about security here. You have mentioned no less than three security goals:

1. Preventing counterfeiting

2. Enforcing tax payments

3. Preventing theft

Now, let's see what happens with Bitcoin:

1. Counterfeiting is replaced with double spending, and you need at least as much energy to be devoted to fighting this as would be needed for an attack.

2. Bitcoin does nothing to reduce the energy needed to enforce tax payments, it just shifts the goalposts slightly.

3. Wallet theft is a real problem, and Bitcoin itself does nothing to combat it; you still need to devote energy to securing your wallet, no different than depositing money in a bank.

In other words, two of the three security goals that you mentioned are not addressed in any meaningful way by Bitcoin, and the one that is addressed still winds up requiring far more energy than is needed for fiat currency. Even if paper money turns out to be too inefficient, Chaum's research in the 80s and 90s showed the world how to create digital cash that simultaneously allows for anonymous payments, prevents double spending, and requires substantially less work to secure than it does to attack (exponentially so, in fact). The difference, of course, is that Chaum's designs all called for a central bank in the system, which you already need with fiat currency.

"I'd be surprised if the energy required to keep billions of ASICs humming is more than the energy required to keep millions of people humming."

The problem is that the number of ASICs that need to be powered on will increase as the attempts to attack Bitcoin increase, until eventually half the energy output of the planet is being devoted to ASICs. That is not the situation with fiat currency, as noted above.

"Further, the fractional reserve system is far from rock solid. It appears to be solid, until a tipping point of confidence is reached, at which point it falls like a house of cards. It's the definition of a con game."

Except that the "confidence" is not in the banking system, but in the legal system that supports it. Fiat currency's value stems from tax laws, debt laws, torts, and so forth, and when people talk about "confidence in the government" what they really mean is "confidence in the government's ability to enforce the law." If you truly lack such confidence, try this: stop paying your taxes. As long as people believe that failure to pay their taxes will result in losing their property and freedom, people will continue to demand payment with fiat currency -- the only currency they can use to pay their taxes. Likewise with people who have to repay loans (you would be insane to issue a loan in a currency that courts do not deal in), people who have been ordered by courts to make certain payments (again, this will be in whatever currency the courts deal in), people who must pay parking tickets, etc., etc., etc.

The vast majority of businesses that "accept Bitcoin" are actually accepting fiat currency payments, via a service that exchanges Bitcoin for fiat currency, and only because that allows them to accept electronic payments with lower transaction fees compared to the alternatives. That is how pervasive the "house of cards" is.