Satoshi was being realistic about its own design unlike all of you small blockists who didn't had the genius to invent bitcoin. He obviously wasn't locked up in a prison of fear.
The conditions under which Satoshi himself established a block size limit, remain today.
No. The recent spam attacks prove this wrong. The limit is useless.
If there was no limit, the consequences would be even worse in theory, because it would be like having no brake, so you would be pushed against a cliff without no way to stop. The bloat is a defense mechanism in a way. We need a good intermediate solution and raising the blockchain to a ridiculous level doesn't seem like one.
In theory it could also be better with an increased blocksize, since with an eight megabyte blocksize it would theoretically be eight times more expensive to attack Bitcoin by overloading the network. From my perspective the limit represents the cliff that causes transactions not to be confirmed when the network becomes overloaded.