I thought the point was to increase the block size limit to avoid having to use off chain transactions.
The block size limit should raised because off-chain transaction systems should not be artificially subsided.
If the limit is not raised, the more transactions will be pushed off chain which otherwise belong on the chain, which won't exactly kill the entire space right away, but as a plan B it's far inferior to allowing the distribution of on-chain vs off-chain transactions to find a natural balance.