Think of it as a "devolved" market, where vendors still list their products and consumers still buy them, but no BTC is held on the site. You transfer BTC directly from your local wallet to the vendor's. I think it could go well - only problem is I'm not sure how escrow would work.
2/3 multisig solves exactly this problem. The buyer, the seller, and the admin each generate a key pair, and 2/3 of them are required to spend the funds. If all goes well, the buyer and seller release escrow together. If there's a dispute, then the admin arbitrates, and releases escrow together with the winning side. The admin can't steal funds without collusion of either the buyer or the seller.
Bitcoin supports this. There is no need to use an altcoin, though most altcoins also support this. OpenBazaar supports this (using Bitcoin), but has many features unsuitable for privacy-conscious users---read their own FAQ. Some centralized markets support it now, but either the market briefly handles all the private keys (which defeats the purpose, since they could keep a copy), or you have to take some extra steps in your wallet software.
This solves a real problem, so it will get adopted. That's slow but inevitable.