Where did the data for that chart come from? I'm interested in examining it in greater detail, along with seeing the full set of assumptions and parameters.
The specifics are rubbish. Unfortunately, making an accurate estimate for the system involves things that are constantly changing and can't be measured-- and the story it tells doesn't hold when mining is very centralized.
The point I was attempting to make was that the general shape (which I believe is robust across parameters; excluding ones which centralize mining); is such that if you can't be sure to get the parameters right, you want to be fairly confident that they're wrong in the too-high direction, because being too low (relative to the network geometry) is bad compared to being too high. This has also been demonstrated in practice somewhat: there was a "liquidcoin" altcoin created with fixed difficulty, and as its hashrate increased its orphan rate went through the roof-- eventually it stopped converging completely.
(Though I do agree with the general sentiment, that if we were taking additional risk of a given amount, its more attractive to take it in the form of decreased intervals than increased blocksize; but unfortunately the decreased intervals involve strictly more uncertainty.)
