Lets say for example we set a Target, that the average Blocksize is always 80% of max. Blocksize and adjust the max. Blocksize by max. +-20% all 2016 Blocks to meet this Target.
This would ensure that Blockchain space always remains scarce, therefore ensuring TX fees for fast transaction, by at the same time ensuring that it will always be possible to make a transaction.
I'm looking forward to learn why this wouldn't work.
The problem with this is that some pools still mine blocks where the only transaction is the one that awards them their subsidy, and that can really poison averages.
As far as using bitcoins in retail on a reasonable timeline goes, a few of the gambling sites have developed very good ways to prevent nasty stuff by identifying the low risk transactions which may as well be accepted immediately. I don't find the interval of time between blocks to be problematic.
Honestly as far as block size goes, I'm pretty comfortable with Gavin making a decision as benevolent dictator and letting everyone know at what point in the future the blocksize increases to its next finite (or formulaic) step.