Scarcity in terms of space in blocks for transactions to be confirmed is necessary to cultivate a healthy transaction fee market.
This argument presumes the value of the transactions will justify exorbitant fees.
No it really doesn't, it just says there's a market, a set of variables and that the former will bitchslap the latter into place.
Or it won't. You probably haven't noticed, but Bitcoin is open source and scalability is considered by the overwhelming majority to be an issue. The beauty of an open source project is you can do whatever you want and nobody will care.