One of the key points of Bitcoin (and hard money philosophy in general) is that the idea of a separately-existing title is a bug, not a feature. When you start with the assertion that privkey is equivalent to ownership, you can build abstractions on top using computer code rather that legal code. Without this assertion, software abstractions cannot be built as the software's reasoning can always be invalidated by an external court complaint.

In terms of abstractions, the analogous scenarios for the estate planning case:

1. Private keys secret-split between individual heirs and dead-man's switch - beneficiary.

2. Private key mutually secret-split between heirs - work it out, possibly escalating to probate.

3. Private key sitting around on paper waiting to be picked up by whomever discovers it - same as cash sitting around.

4. Private key known only to decedent - value escheats to the void (or the currency itself, depending on your interpretation).

The question whether Bitcoin specifically is fucked is whether it is strong enough to survive the inevitable clash with the traditional [0] legal system that will insist on destroying one of its core properties. Morons that brazenly advocate stealing cryptocurrency don't help, but a lack of them wouldn't mean the state would remain uninvolved, either.

[0] Yes, "the" legal system is one of many possible legal systems. The philosophy of common law asserts that it's inevitable and manifest. But it's anything but.