If this limit increases faster than than the interest in spending money for transactions then it will kill Bitcoin.
Bitcoin has survived for 6 years without the block size limit effectively constraining the block size, why will this established pattern suddenly reverse if the limit is maintained high enough to not constrain the block size (or removed entirely?)
I wouldn't go so far as to claim that it WILL kill Bitcoin, but a too-high max block size does permit bad behaviors, which can have pernicious effects. There really isn't a reason to have the capability for miners (or pools) have the ability to include 60x the normal amount of transactions creating huge blocks that they can propagate quicker than small sites can download and verify. This gives yet another edge to the largest miner pools, and it is unnecessary.
Gavin's solution is a simple one, which is a good thing, but it is obviously not the BEST solution.
Implementing anything whilst IN a crisis, we will end up with a sub-optimal solution, because folks will do whatever it takes to get out of the crisis.
We are NOT in a crisis now, our average block size is well less than 50% of the max, there isn't any massive queueing, things are fine today, so lets do it right rather than just what it expedient?
Lets implement a maximum block size that can adjust to what is needed rather than just guessing at what might be needed? Lets build a protocol for the next 100 years, not the next 100 weeks? I think we can do better, and we currently have the time to do so.