A lot of people on these forums like to dismiss arguments like these because they are "so far in the future that it will never impact us" rather than evaluating them for the long-term viability of Bitcoin. It's somewhat disappointing, especially when at some point in the future, it will become a real problem. Having a billion people trying to trade in Bitcoin at 8 decimal places .000000010 won't work.
Of course it will work. Bitcoin has 1E14 discrete units called a satoshi worth 1E-8 BTC each. Say hypothetically decades from now Bitcoin has a value such that 1 satoshi (1E-8) is worth > $0.10 (2012 dollars) and it starts to disrupt commerce (can't trade in values less than $0.10 equivelent). We can add more digits by modifying the protocol. We can make the smallest unit in Bitcoin 1E-12 or 1E-16 and gain a million fold increase in the number of discrete units.
If you are saying it wouldn't work because trading in 0.0000001 BTC increments is confusing well that is just silly. If Bitcoin apreciated to the point that most commerce was done in small units people would use mBTC or uBTC or simply satoshis in daily vocabulary.
Dude I lost 130 mBTC (maybe informally called millibits) on that game last night.
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So you ordered a #1 combo with large fries that will be 138 satoshis.
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There is no possible scenario where confiscation of wealth is either necessary or desired. Even if every single Bitcoin except 1 satoshi was lost the network would continue by adding more digits.