We need most of the planet's double-sha256 capability devoted to Bitcoin mining instead of doing something else.
As long as that condition holds, the actual hash rate isn't very important.
That's not clear at all. We need, at a minimum, a majority of *active* hashrate to not "attack" the network.
Your economic theories aside, there is very little consensus on how we will achieve this.
I'm an optimist. I'd like to think that regardless of block size, a million people will donate a little bit of hashing on their USB sticks at a loss leading to an extremely hard to censor network. The other equilibrium aren't nearly so clean.