Because of the massive (and justified) collapse of confidence in everyone building web servies for this space.
It shouldn't surprise anyone that after months (years!) of BTC services absconding with millions of dollars worth of users money and now the exchanges starting to collapse in a similar fashion (users can't get money out) that the wider user base of bitcoin would begin to default toward not trusting services that purport to store coins 'securely'.
This is bad in the short term as the remaining exchanges prices show, but likely a positive progression in the safe use of crypto currencies going forward--
I generally agree that this is bad in the short term, but likely a net positive in the long run. Bitcoin's delivering some very harsh lessons in crypto-currency security.
Speaking from personal experience; I was driven to learn a lot about crypto and information security in general because of bitcoin.
As a developer I think the correct mindset towards security is important to have day in and day out; Perhaps that's the real social engineering of the NSA leaks. Nothing could be better for the distributed security of our country than each and every individual developer being more acutely aware of security concerns at every keystroke.
It shouldn't surprise anyone that after months (years!) of BTC services absconding with millions of dollars worth of users money and now the exchanges starting to collapse in a similar fashion (users can't get money out) that the wider user base of bitcoin would begin to default toward not trusting services that purport to store coins 'securely'.
This is bad in the short term as the remaining exchanges prices show, but likely a positive progression in the safe use of crypto currencies going forward--