No they expanded the ecosystem by increasing innovation (even if in most cases that innovation was only to increase speculation opportunities since many come to this ecosystem for speculation) and that insight is also the generative essence of my insight into what altcoins need to do to survive along with pegged side chains.

Sidechains are altcoins, which use Bitcoins as their basis. By subscribing to the sidechain, you subscribe to the same ethos as Bitcoin... namely, the vast number of coins owned by Satoshi and now the core developers (some of whom were rumoured or seen to have made large purchases of Bitcoins with the formation of Blockstream).

The idea is that the dynamic block limit should give us the ability to slowly grow as consumer technology (bandwidth, latency, disk space) improves, but if we find that we're starting to outpace it we can make the limiter more aggressive. Moreover, we're (hopefully) going to have enough functionality moved to daughter-chains / sidechains over the next few years that mainchain won't be filled with unnecessary metadata.