It's an option, not a requirement. Which only adds value, not reduces it. Mom and pa can split the key in 5-of-10 via SSSS (Shamir's Secret Sharing Scheme) and send portions to all their trusted friends. It'll be safer than putting savings in the bank. We just need some decent UI and apps for that.
No. Deterministic wallets just a bad idea. By using a deterministic wallet it becomes infinitely easier to brute force and your funds are at substantial risk. Even if you think you're using a strong password. There are already people spending a lot of computational power to build rainbow tables of brain wallets.
Please do not encourage people to use deterministic wallets, you are doing them a disservice.
Do not confuse "deterministic wallet" with "brainwallet".
Brainwallet is very dangerous, but also very powerful. It's not for mommy and daddy, but for people who know what they are doing and have reasons to hide money very well. There's nothing inherently bad with it. It all depends on the UI you are using. Decent UI may generate a deterministic list of private keys, so don't even lose privacy. Electrum does something similar, but you have to remember 12-word seed. With super-expensive KDF you may have decent protection even with a shorter passphrase (expensive meaning taking 30 seconds and 1 Gb of memory).
"Deterministic wallet" is the one which generates all the keys deterministically from the single seed. Preferably, it also uses deterministic signatures. This is much better than fully random one like in BitcoinQT because you can create a good random seed just once (using /dev/random plus some explicit random user input to protect against shitty or backdoored RNG) and then have a guarantee that all subsequent addresses and keys are not affected by an RNG you use. Also, you don't need to back up your wallet more than once if you can derive all future addresses from one seed. You only need a good cryptographic hash function for that. SHA256^2 or SHA3 seems like good enough to me.
