That's it exactly. I think they could. Bicycles already are in China and when I was in Europe, I was surprised at the amount of bicycles on the roads.
The obstacles to me are weather, distance, and probably laziness or habit bred by knowing there is another way.
Riding a bike loses some of its fun in the rain or snow, especially for longer distances. Also, some areas of the US are sparsely populated, and the distances to be travelled limit the day to day usefulness. They still are practical in the more urban areas. Do you really need a two ton car to travel a couple miles to pick up a gallon of milk?
A couple ideas to promote MBs would be fun and cost. Riding a bike can be more fun than driving a car, very much like riding a motorcycle. As fuel costs continue to rise, a bike becomes more attractive. The cost to drive a mile would also include insurance, licensing, and associated fees.
Then there is the actual *green* aspect ie. actually wanting to reduce pollution and congestion, and the various problems caused by the fact that the automobile exists.
Congestion, both traffic and parking are a positive reinforcement for bikes. From personal experience, if I have to go to the city offices for business, it is more attractive to take a bike. I have spent nearly an hour trying to find a place to park, and still have to walk 10 blocks. With a bike, it is a matter of the nearest bike rack.
I don't see the MB as the primary transportation for the masses, but it is practical to replace the 2nd or 3rd car. This is for the average person of course. Some of us just like to ride our bikes.