I must agree that breaches like this are bad for the image of crypto currency as far as it's image with folks new to the whole world of crypto goes. Personally I believe that the current state of bitcoins functionality has deeply contributed to the decrease in value.
Those of us who have used BTC for a long time can see the changes and have all but quit actually using BTC due to insanely high fees and slow TXs. Personally I fear that if these problems are not fixed that it will only further damage BTC.
All it will take is for another alt coin to start getting more acceptance and recognition and Bitcoin could possibly become the Myspace of cryptocurrency.
I just hope something is done soon because I love Bitcoin and would love to get back to being able to use it.