In 10-years, a modern smartphone/computer will be able to run the full processing node if the Max_Block_Size remains 1MB. This is a clear economic benefit for Bitcoin: Decentralized Bitcoin verification. In fact in a few years, virtually every computer will be able to process the entire blockchain without issue thus making Bitcoin extremely unique in the realm of payments.
What is the use of having portable devices act as full nodes if you can't (because of fees) use bitcoin for purchasing anything smaller than a house? As I see it, your argument is not valid. With 1MB blocksize limit, even if Bitcoin remains a relatively small niche currency, the limit will act as a hard constraint on the potential utility of the currency. Of course, once we start hitting the limit, it will hurt Bitcoin's public image so much that it's conceivable so many people will move away from Bitcoin that we get few more years of time to fix the issue.
Lets not get ahead of ourselves here. I expect that we will have a multi-layered system the vast majority of the transactions being made off-chain.
Additionally; who is to say that one wouldn't want to verify their house transaction with a smart-phone.
People completely mis-judge the free-market. If you have to use alt-chains because the fees are so high, well isn't that a success of bitcoin already! By no stage has bitcoin failed then.
The argument for larger blocks is VALID for a proticol that isn't Bitcoin. However it is a catch 22, for Bitcoin. It only becomes a problem if Bitcoin is a success. If Bitcoin is a success, by definition it isn't a problem.
Setup your own Electrum server with your computer at home and verify your house transaction with a smart-phone through it. Therefore you don't need to trust a third party
Moreover, the sentence "It only becomes a problem if Bitcoin is a success. If Bitcoin is a success, by definition it isn't a problem." is self-contradicting