Dynamic resizing is the obvious compromise between the camps. Everyone can get what they claim to want from it, without having to compromise either.
If the market chooses bigger blocks, then the market can test whether or not that works out in practice. If yes, then Gavin's design solution actually was the best idea after all. If not, then the market retreating will cause the blocksize to retreat also (which wouldn't be possible under BIP100).
The market could even try out bigger blocks, decide it doesn't work, try the alternative, dislike that more than bigger blocks, and then revert to some compromoise blocksize. Y'know, it's almost as if the free market works better than central planning...
No sure if you have gone through OP's proposal. BIP 101 has no provision to decrease block size, instead it flat out increases without considering the network status. BIP 100 is employing some miner's voting system, which requires a separate activity from miner's end. The reason I feel OP's proposal is beautiful is because it requires users to fill up nodes with high Tx volumes and then miners to fill up blocks from mempool. So, it is not only the miner, but also the end users have a say in increasing or decreasing block size.
Ah, I did actually mean BIP 101 and not 100. Thanks for pointing it out. And I agree that this proposal sounds good, but I was making the more general point that some form of dynamic resizing scheme is best.