Well-meaning investors have been pushing for various currency-related use cases for Namecoin such as ATMs, acceptance at retailers, etc. The core development team sees these efforts as benign but generally do not expend time nor funds on them. Why would developers of a currency not place a priority on currency related use-cases?
The answer is that we place a priority on the specific use-cases that differentiate Namecoin from Bitcoin: DNS, ID, etc. Namecoin’s value comes from its utility as a naming system whereas Bitcoin’s value is primarily derived from its use as a currency. Competing with Bitcoin for dominance as a currency of exchange is suicide: Bitcoin has network effects that will overpower every other competitor in its market.
Furthermore, it is not clear that generic retail use of Namecoin is beneficial: most retailers immediately exchange crypto currencies into a reserve currency. Spending Namecoin at a retailer is only a step removed from exchanging Namecoin for fiat directly. Use as a reserve currency is Bitcoin’s problem, we have our own troubles to worry about.