This matter has not been settled at all. Core has made its position rather clear, it is diverting from the original vision of Satoshi. If Core got its way they would block the stream of transactions in favor of off chain solutions. There is presently massive opposition to this move by Core and I suspect that we will see an industry or user led fork rectifying this situation soon.

This is a test of the governance mechanism within Bitcoin. Core should not decide on the future of Bitcoin for all of us. Bitcoin should not rely on a centralized authority in the form of Core to make decisions for us, the market or the economic majority should rule Bitcoin instead, this is best reflected through having multiple alternative implementations to choose from. Since an election with only one choice would be the equivalent to totalitarianism after all. Fortunately we do now have three alternative implementations which will increase the blocksize. BitcoinXT, Btcd and Bitcoin Unlimited.

Jeff Garzik recently wrote an article describing the dire situation we are in, I do at least have confidence that this situation will resolve itself because of the incentive structure of Bitcoin and the ability to hard fork which ensures the continued freedom of the protocol.

http://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-December/011973.html