Great post OP
But this is not a 'if you build it they will come' situation. If you build out capacity with no way to reverse the changes and they don't come then we get even lower fees and possibly a collapse of our mining community leading to network security vulnerabilities.
I agree deflationary fee's are the way to go but we would need a collaborative protocol for adjusting fees based on bitcoins market cap but how would that work?
Part of the question about max block size is how do we decide on whats a fair fee for transactions based on the needs of the network at any given time to insure security. I don't have the answer to this.
Ultimately your speculating on two things we can not control, our user base and Bitcoins market cap. This is hubris, it's risky without the ability to automatically reduce the max block size on demand to maintain a minimal level of fees to ensure (what still needs to be determined) a minimum level of security based on Bitcoins market cap. The deeper question is 'How thick do the walls of a safe need to be to protect its contents when the value of its contents is always changing?'
I believe we should go for a much bumpier and longer path but ultimately more safe. We should wait until the very last minute to up the block size and each time increase it in miniscule amounts (5% max) only when fees become so high that they start to impede adoption would you see the real consensus we need.
Yes in the short term we lose the ability to handle micro transactions but this would only be temporary, a few years at most if we continue to grow at the same rate and yes some people may jump ship to alt coins with lower fees but they would be doing so at the cost of security, stability and network effect (acceptance.)
