Inflationary nature isn't really an issue for a coin if you can buy services with it and enough new users and money flowing in. I guess the low number of new users is the problem with doge.
Dogecoin will get real into trouble once one coin cost 0.00000001 BTC because then they will only be able to trade against LTC or NxT. After that they will lose a lot of volume.
This is the only problem with inflation in Bitcoin world.
Cryptsy has opened ripple markets for very low priced coins. One ripple is worth less than one NXT.