The point is that bitcoin holders don't need MtGox to hold their money. They would've been safer by far storing it in a 2-of-3 wallet, with one key held by a third party which does passphrase authentication (or similar) before they'll sign a transaction, one held on your computer, and a third stored somewhere hidden as a backup in case one of the other keys cannot be accessed.
Two of these already exist: BitGo[0] and GreenAddress[1]. Try doing that with physical money, and you understand why we have banks. With Bitcoin, you can have any level of security you like, and somebody only has to implement it once.
> That doesn't solve the problem mitigating risk from insolvency
Does FDIC insurance? If the dollar's worth nothing tomorrow, where's the insurance for that?
Everyone in my country has insurance for becoming personally insolvent, it's called welfare. If you have enough bitcoins that losing them would be devastating, you can also get bespoke insurance on them, even if there's not a pre-existing insurance product.
Yes, the FDIC does for when (not if) your funds are lost.
You've also confused deposit insurance with insurance for hypothetical government failure, and drawn a false equivocation with welfare, though my guess is you didn't have any other point so you went with the slippery slope.
Two of these already exist: BitGo[0] and GreenAddress[1]. Try doing that with physical money, and you understand why we have banks. With Bitcoin, you can have any level of security you like, and somebody only has to implement it once.
[0] https://www.bitgo.com/ [1] https://greenaddress.it/en/