I would not be surprised to see 1 dollar = 1000 or 10,000 satoshi [1 bitcoin = $10,000 or $100,000, hope I counted decimal points right ...] in 5-10 years or so, maybe sooner. 1 dollar = .000001 is unlikely to be anytime soon. (I'm talking 2015 dollars here, just to be clear.) But regardless ... what do you mean "what happens" ? If we do get to 1 bitcoin = $ 100,000 it will mean in all likelihood that bitcoin is fulfilling its promise as a payment system, currency, and commodity. (simultaneously).

I am quite familiar with the arguments that deflationary currency is a would-be plague upon all of humanity and I am quite unconvinced. I think it serves TPTB to promote these arguments, flawed though they be, because it justifies the state's control of money.