You can't forget that it's also usually slower than trading off-chain.

It's inferior in a lot of ways, which is why it never took over the way its proponents thought.

it's superior in terms of not having the trusted third party that facilitates your trade make off with your money, as is happening in these self-described exchanges right now. Keeping a trusted third-party in the loop is always cheaper than automating that function using a blockchain, unless the risk is factored in.

The risk of misplacing your keys/passphrase or getting hacked with it in plaintext on your computer may be higher across the end-user population.

"May be higher" is a gross understatement. Is "provably much higher" is closer to the truth.

There are a few classes of users. If you're the type who always uses the "I forgot my password" workflow on sites then you probably are the type who will lose your keys.

But if you're the type of trader who makes a trade and then forgets about it for a while you're at risk of losing the funds left on the exchange - like with Paypal.

Lots of things are tradeoffs. In this case, the tradeoff is that trades are more expensive on chain, but you don't have to worry that the exchange will blow up and lose all your money, like happened with a huge exchange just last week.

As a bonus, Ethereum's scaling roadmap is coming along pretty well, with a pretty clear path to 100K tx/sec within the next few years. That should make transactions quite a bit cheaper.