If space in a block is not a limited resource then miners won't be able to charge for it, mining revenue will drop as the subsidy drops and attacks will become more profitable relative to honest mining.
How many business can you name that maximize their profitability by restricting the number of customers they serve?
If it really worked like that, then why stop at 1 MB? Limit block sizes to a single transaction and all the miners would be rich beyond measure! That would certainly make things more decentralized because miners all over the world would invest in hardware to collect the massive fee that one lucky person per block will be willing to pay.
Why stop there? I'm going to start a car dealership and decide to only sell 10 cars per year. Because I've made the number of cars I sell a limited resource I'll be able to charge more for them, right?
Then I'll open a restaurant called "House of String-Pushing" that only serves regular food but only lets in 3 customers at a time.
If car dealerships sold cars for however much you were willing to pay, down to and including free, you can bet they'd limit the number of cars they "sold". And I doubt you'd even get 10 out of them.
The problem is that we really don't know yet how to operate with the system we have, much less a different one. In a decade or two, when the subsidy is no longer the dominant part of the block reward, maybe then we'll have some idea how to price transactions, and we will be able to think clearly about mechanisms to adjust the block size.
If a miner is generating an 1-GB block and it is just too big for other miners, other miners may simply drop it. It will just stop anyone from generating 1-GB blocks because that will become orphans anyway. An equilibrium will be reached and the block space is still scarce.