At least with fiat currency you have a chance of getting the transaction reversed! Most people will not trust a currency where this is not possible, or at least they will hold it with a centralized trusted custodian who can offer transaction reversal—which defeats the purpose!

That isn't a property of fiat currency, that's a property of the bank/credit card you use.

Someone could make a service with delayed settlement that is denominated with Bitcoin, and it would work just the same.

If you pay someone with a $100 bill, your only recourse is to ask for them to return it: the same as Bitcoin.

Sure, but there’s no way for the delayed settlement mechanism to handle fuzzy real-world judgment calls (such as a dispute about whether a service was rendered or not) without resorting to a centralized oracle of some sort—and then you’ve broken trustlessness and may as well have avoided blockchain altogether and saved yourself the transaction fees.