That's a good question, it is a big problem. I think the cause of it is that everyone seems to be holding them as an investment rather then actually using them to buy things.  As the average person starts using them this problem to go away.

This is an interesting question... A stable price would attract more users and with new users the price of bitcoin would go up. Its not really about the price being stable but the user base being stable when that happens a more stable price will form. We also must remember that there is a cap to the total number of bitcoins that can be mined so as long as the user base keeps growing so will the price of bitcoin. So to answer your question more directly a stable low price would not be a good thing because that would mean just enough new people are using bitcoin to offset the amount being mined. Ideally assuming we all are all invested in bitcoin we expect the price to go up up up and if it stayed the same we would be unhappy.