This isn't "selling fear", this is common sense. This isn't about sending transactions without a fee, this is saying your transaction may not make it in even with a fee. Get the premise right before you decide you're disagreeing with it. Full means full. As in wait for the next one. And if that one is full, wait for the one after that. How long do you think people will wait before complaining that Bitcoin is slow and useless? Bearing in mind this is the internet and people complain about the slightest little inconvenience like it's the end of the world. I don't want to see the outcome of that fallout.
OK, lets get the premise right. If we ever get to a scarcity market for transactions, it might look a little more like this:
1) Your client would inform you of the amount of fee you should include if you want your transaction confirmed in an average of X-minutes, where you can set X. If you want it faster, or guaranteed delivery, you pay more. It becomes an auction market with a new auction every 10 minutes. Full means full *at that price*.
2) Service Providers and high volume transaction businesses will increasingly do a lot of off-chain ledger-ing (maybe with side chains) and less frequent settlement transactions on the block chain.
3) Back door off-chain payment deals (maybe in fiat) will be made by some high value transaction makers to get preferential treatment by their favorite miner (who is to say that this isn't already happening?)
4) People will save transactions for off-peak times, and combine transactions to economize.
5) Others won't care and will just pay 'whatever'
6) Lots of folks on the internet will complain.
Bitcoin would probably grow a little slower, but please realize that this is an endurance race even though sometimes it feels like a sprint. Bitcoin can never lose by growing too slowly, only by growing fatal flaws. It is worth it to be careful.
It's a nice theory, but without the aid of a crystal ball or time travel, I don't know how your client is supposed to be able to tell you how full the next block is going to be. I suppose it could give you an amount based on the average fee paid in the previous block, but I don't know if that would accurately forecast the amount you'd need to pay to guarantee making it in. Just to be clear, though, (before any anti-forkers jump on this as a sign of my conceeding) even with a system like this in place, 1MB would still be insufficient for any considerable increase in adoption. Also bear in mind that if it gets too expensive, people will just use something else. There's a very delicate balancing act to maintain if we go down that route.
By the time you get down to points 4, 5 and 6, I'm afraid that's where it falls apart completely. Why would someone save transactions for an off-peak time when there will be others systems they can use right away? If it reaches that point, people won't just complain, they'll leave and use another coin. This leads us back to the whole "elitist chain" argument. If it doesn't work for the masses, the masses won't use it.