What if these insufficient transaction fees causes miners to accept only higher fees, and this encourages miners to only accept even higher fees. Because of these high fees, people stop transacting.
Perhaps the only way to compensate is inflation?
If fees aren't enough for the average miner to break even, the least efficient miners will stop mining, the difficulty will go down and profitability will go up for the remaining miners.
Interestingly, this happens almost indefinitely. Under ideal conditions, neglecting block limits, difficulty drops arbitrarily low. The transaction fee is therefore determined by the block limits and the amount of transactions. Sadly, it's not self-regulating in the sense that the minting of new Bitcoins is now.
I kicked off a discussion about this back in 2011 (
https://bitcointalk.org/index.php?topic=6284.0). By now, the common answers are that either block limits will remain or the block chain will be secured by insurance companies that stockpile mining equipment and aid the older branch in case of a fork.
In the latter case, look at the bright side: less wasted electricity and less problems with difficulty oscillations.
Heh. Look who was debating in that thread, it's a who's who of Bitcoin now. I was only on a single Bitcoin conference and met a lot of these guys, heard of their products or projects, there's the devs and admins... now who wants to say the topic is boring and simple? 
