Satoshi didn't have a 1MB limit in it. The limit was originally Hal Finney's idea. Both Satoshi and I objected that it wouldn't scale at 1MB. Hal was concerned about a potential DoS attack though, and after discussion, Satoshi agreed. The 1MB limit was there by the time Bitcoin launched.
It would be great if Satoshi would chime in. Maybe if the coin does indeed begin to snap in two?
There is no need for Satoshi to chime in (although if he did reappear I have a list of questions). The first version of the client had no block size limit. The second version of the client had no block size limit. The next 146 commits to the repo had no block size limit. The source code is the proof. The block size limit wasn't added as an anti-spam mechanism until more than 21 months after the genesis block.
I think Satoshi was worried about rapid improvements in hashing power giving one rogue miner the ability to bloat the blockchain with a series of large (32MB?) blocks. The first mention of using FPGAs that I can find on Bitcointalk is July 2010, three months before the 1MB change. At the time Bitcoin was gaining traction with a community behind it, and a serious spam attack would have damaged its progress.
Thanks for the hashing analysis from a much more experienced perspective! I am still interested in how this little processor can do... even if I was off by a factor of about 10, it might still be competitive with much more expensive and energy intensive desktop processors. I can get about 2100 khash/sec using all 4 cores of my 64 bit machine when the system is otherwise idle, and that certainly makes the fans blow a lot of hot air. I though it might be possible for VIA to overcome because custom circuits (FPGA or ASIC) for some cryptographic functions have in the past proved orders of magnitude faster than general desktop processors or even GPUs.
(my bold emphasis)