So, there were a lot of bitcoins generated in 2009 and later that have been "lost" one way or another.
If the private key is truly lost then the coins are permanently lost baring some future cryptographic break in the primitives used for Bitcoin.
Regardless of the reason, the actual amount of bitcoins in circulation (barring the planned inflation to 21 million), has to decrease by simple attrition.
The number in supply will decline but likely not for decades as until all are mined the rate of new minting is very likely to be higher than the rate lost.
Would there be any desire to reallocate "lost" bitcoins at some point in the future?
No. Possibly by some minority but Bitcoin works on consensus and there is no real possibility of the protocol being ammended to confiscate coins. The network can not determine if a coin is "lost" only that it hasn't been transfered (yet).
If so, does this necessitate the existence of altcoins?
No Bitcoin is highly divisible and if necessary (I doubt it but it is possible) that divisibility can be extended as needed. The entire network could operate with a single Bitcoin. Money is merely an accounting system. The nominal number of base units is utterly irrelevant. 21 million is simply an arbitrary number. It would have no change on the network if it was 21 trillion, or 21.
