The fact that it has problems is entirely tangential to the fact that it does what's needed. What's needed is "I send a thing to a person and it soon-ish shows up on their end", with the bonus of knowing that someone would have to expend significant effort to intercept it. This has been true since the invention of writing and very few scenarios needed more. Anything on top of that (spam rejection, steong verification and encryption, etc.) is nice to have, but clearly not critical, because otherwise we still wouldn't all be relying on paper mail, email and sms for even the most critical of things.

So yes, we really do need something better than email (and we have plenty of options), but it doesn't have to (nor will it any time soon) replace email.