Why would it "grind to a halt"? Economies don't function just because money is being printed. Are you using the same argument for the US dollar and assuming our "economy would grind to a halt" if the government didn't print more dollars? Of course not.
Blocks are used to verify transactions. For example, Bitcoin Market requires two confirmations. If a block takes two hours to make, then it would take four hours to put Bitcoins into Bitcoin Market. This would not be good.
When people start adding transaction fees, the value of the current block will steadily rise until it is solved. If this gets very high, everyone will attempt to "win the jackpot". The market will solve the problem.
Botnets will probably be supporting Bitcoin in the future, so it doesn't really matter anyway.