Deflation is just as bad as inflation. Stability is what's best.
Although this is a fail:
One of the strengths of bitcoins, namely that their quantity is limited, is also a weakness. The money supply has to grow more or less in proportion to the underlying economy lest we have deflation and depression. Regulating the money supply is why you need central bankers, feckless though they sometimes are. For that reason bitcoins as currently constituted will never replace government-backed money
Money supply does "increase" with the bitcoin economy, as more and more decimals can be used.