The argument for a large block is to reduce the fee for average users, but what if a small block is better for bitcoin's adoption?
I cant understand how coin with high fees can have better adoption (number of people using it), when there will be cheaper altcoin alternative (fees)... Can such coin just be used for international remitance players instead ? Well why not look for a cheaper alternative instead again ? Ok, and what about store of value, at least. Why would you store your value on a coin when the coin can hardly to be used for anything ?
As I see it, if you cap how much coin can be used (number of transactions), people just use other coins for the same purpose, and just stop caring about Bitcoin or even consider storing value there, just like you do today with random altcoin or coin you have no use for.
If bitcoin's value rise 400% per year and it is very expensive to transact in bitcoin (like 100 USD per transaction), I think everyone would still rush into bitcoin like there is no tomorrow. They will do like pooled miners, combine their transactions as a single one to save the transaction fee
You should understand why most of the people come to bitcoin: Because this is a gold rush in cyberspace. They don't desperately want cheap transactions, so the payment function is the least to worry about. The California gold rush created the boom of the west coast, similar to bitcoin mining frenzy created most of these bitcoin companies today
The most attractive part of bitcoin is that by mining bitcoin, you can become your own central bank, participating in the money creation. This is totally impossible in today's fiat money system, and this property already attracted lots of enthuthiasts around the world when bitcoin were still worth almost nothing
There is a false claim from banks that money's value are generated from its transaction demand (to cover the fact that fiat money does not have any cost), but for honest money with a production cost (like gold or bitcoin), their value are not generated through its transaction demand. The fact that gold has quit transaction for decades but still rise in value clearly denied that theory. In fact, even for fiat money like USD, its value is not decided by how many people use it, but by people's trust. That's the reason when you have much lower transaction demand during a recession, the value of USD even rises because people desperately want USD when they are poor
Once you cleared this misconception, you will understand that raised level of bitcoin transaction capacity will not raise its value, its value would still be mainly decided by the mining cost and long term storage demand
So the question is: To make bitcoin a forever prosperous gold rush or a mobile payment system like other similar solutions?