I don't like topics about block size. It's smarter to talk about free space within each block. On an average computer, most people would say you need to keep at least 15% free space on your hard disk so that you work on files without hiccup. It's the same thing with BTC. If we're close to max capacity, things will be less smooth. It may even stall at some point and we don't want to see that.
If we perpetually increase capacity ahead of demand, fees will never rise. Transactions will always be free or nearly free for users. This will not end well in a future where block subsidy ends and fees alone must support the security of the network (by incentivizing miners). If we did this, we are basically depending on mass adoption and skyrocketing price being guaranteed. That's probably not a good engineering decision.