I agree with Gavin, and I don't understand what outcome you're arguing for.
You want to keep the block size limit so Dave can mine off a GPRS connection forever? Why should I care about Dave? The other miners will make larger blocks than he can handle and he'll have to stop mining and switch to an SPV client. Sucks to be him.
I primarily want to keep the limit fixed so we don't have a perverse incentive. Ensuring that everyone can audit the network properly is secondarily.
If there was consensus to, say, raise the limit to 100MiB that's something I could be convinced of. But only if raising the limit is
not something that happens automatically under miner control, nor if the limit is going to just be raised year after year.
Your belief we have to have some hard cap on the N in O(N) doesn't ring true to me. Demand for transactions isn't actually infinite. There is some point at which Bitcoin may only grow very slowly if at all (and is outpaced by hardware improvements).
Yes, there will likely only be around 10 billion people on the planet, but that's a hell of a lot of transactions. At one transaction per person per day you've got 115,700 transactions per second. Sorry, but there are lots of reasons to think Moore's law is coming to an end, and in any case the issue I'm most worried about is network scaling, and network scaling doesn't even follow Moore's law.
Making design decisions assuming technology is going to keep getting exponentially better is a huge risk when transistors are already only a few orders of magnitude away from being single atoms.
Likewise, miners have all kinds of perverse incentives in theory that don't seem to happen in practice. Like, why do miners include any transactions at all? They can minimize their costs by not doing so. Yet, transactions confirm. You really can't prove anything about miners behaviour, just guess at what some of them might do.
The fact that miners include transactions at all is a great example of how small the block limit is. Right now the risk of orphans due to slow propagation is low enough that the difference between a 1KiB block and a 250KiB block is so inconsequential that pools just run the reference client code and don't bother tweaking it. I wouldn't be the slightest bit surprised to be told that there aren't any pools with even a single full-time employee, so why would I expect people to really put in the effort to optimize revenue, when it'll probably lead to a bunch of angry forum posts and miners leaving because they think the pool will damage Bitcoin?
I don't personally have any interest in working on a system that boils down to a complicated and expensive replacement for wire transfers. And I suspect many other developers, including Gavin, don't either. If Gavin decides to lift the cap, I guess you and Gregory could create a separate alt-coin that has hard block size caps and see how things play out over the long term.
I don't have any interest in working on a system that boils down to a complicated and expensive replacement for PayPal.
Decentralization is the fundamental thing that makes Bitcoin special.