Bitcoin doesn't render Western Union obsolete until the day remote Burkinabe villages can walk to their local store and pick up the US-resident cousin's salary earned in CFA Franc banknotes. A highly volatile intermediary currency is hardly an advantage there.
That's completely true, but it's also true that if that day comes and Bitcoin is so entreched in the global marketplace so you can exchange it in Burkinabe villages, then it will be worth 100x today's price (especially when taking bubble effects into consideration). For some people in some situations that can be a rational bet to make.
Yes, it has a long way to go, but it's off to a good start. I doubt a significant portion of Western Union transactions are to ultra-remote locations, but I could be wrong.
