The answer I've heard is that Bitcoin has utility as a payment network somewhat independent of its usefulness as a value store. This is most of how Bitcoin is used currently (save speculation)
And yet, Krugman is probably right to suggest that, as a currency, BitCoin will need to also be a store of value. Which it currently does not seem to be, and I don't see how it will become one.
He could be right, he'd just be missing the point. He's trying to jam a square peg into a circular hole and calling it "evil" for not fitting.
What I'd actually be interested in reading is a proposal from Krugman (or someone else) for a hashcash/cryptocoin/digital money scheme that addresses their concerns.
It would be hugely more interesting to hear economists discuss how new technology can advance antiquated, federated payment networks rather than pointing out well-known flaws in a very immature technology (that I'm still not entirely convinced they understand, technologically speaking).
