My prediction for what will happen if we DON'T increase the block size limit:
At some point in the future (this year probably), the block size limit will be reached. People will start noticing that their transactions don't get confirmations, and they start increasing transaction fees.
It would be nice if this is true, but bitcoin will hit the limit like a train hitting the buffers and there will be widespread chaos. Right now the price on mtgox has hit silver parity. This is big news and will accelerate wider adoption. Yes, SD could be throttled back to give breathing space, but only a few weeks.
At the very least the 1Mb limit should be decoupled from block-readers, and soon, so that only block-writers are constrained.
They don't? Users of mtgox can send each other bitcoins off blockchain, so can users of most other exchanges, hell Coinbase is even built with this being it's primary goal..
I defer to your deeper knowledge on this...