So far I like this proposal very much, too.
I'm for Gavins simple 20MB kicking-the-can-down-the-road proposal. With the rollover penalty in place I might be willing to wait longer and let some pressure build on developing scaling solutions.
The elastic cap, penalty fee pool and the hard limit could be addressed seperately, although it probably makes not much sense to introduce this mechanism with the current block size limit.
In this context I'd like to add some visibility to TierNolan's post on the second page:
... increasing the block size requires a hard fork, but the fee pool part could be accomplished purely with a soft fork.
It seems viable to set a high hard limit, and start with a lower-than-max elastic cap, which could be increased further at some point in the future.