If the block size limit is reached (for the average block), miners will implement algorithms to select transactions to include so as to maximize the fee collected. This will drive up the cost of fees as people compete to have their transactions included in a timely manner. Let's keep bitcoin the cheapest transaction processor around by avoiding such a scenario!
Let's not! If security needs to be paid markets will understand and self adjust. Why take it over limit and be sure small time merchant and miners can't keep up with bandwidth and storage requirements. It will be feasible in a few years though.