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 be confirmed when the network becomes overloaded.
As long as txs are included under cost, anything that raises fees is good for sustainability. With the spam attack, we saw the average fee raise. This is GOOD without any shadow of a doubt.
Ideally we should be having full blocks all the time and some backlog so there may appear a fee market. Especially after the halving as mining gaps will appear and they will weaken the network otherwise.
I really do strongly disagree with this point, high fees and unreliable transactions would not be good for Bitcoin adoption and public perception. I really do think if people allowed this to happen to Bitcoin, which I do not presently think will happen, this would essentially not allow Bitcoin to effectively compete with other crypocurrencies and payment methods. Under such a scenario I would expect another cryptocurrency to become more dominant. I personally would be forced to stop using Bitcoin both because of the high fees and unreliable transactions. I would have to shift my activities over to another blockchain which would function in a similar way to how Bitcoin used to be, before the blocks became consistently full.