Already controversy is brewing... Already businesses are starting to back away from bitcoin because if the block limit isn't raised then one of three things will happen: 1. Bitcoin fails. 2. Bitcoin gets used only for moving large amounts of money and other cryptocurrencies take over eventually displacing bitcoin itself. 3. Bitcoin gets used for only moving large amounts of money and "bitcoin clearing houses" fill the gaps, which increase the risk of fraud/theft/unaccountability, add avenues of attack, and form REAL centralization. Not some hypothetical BS.
Indeed. The centralization that comes from off-the-chain transactions is exactly the kind of centralization that our current world financial structure is based on. It will, for example, allow widespread use of fractional reserve banking, which is not possible with Bitcoin right now. Whatever happens, we must strive to keep most transactions in the blockchain (most, not necessarily all), otherwise the whole idea behind Bitcoin is more or less doomed.