Suggester, the BTC price will become much more stable as soon the worth of all BTC (~ 21 million) is around the worth of all currencies of the world (BTC is a global currency), or already if it is much below, lets say 1/3 of the global money worth.
If the day comes you have to pay 1 million USD for 1 BTC, I guess the price will become more stable.      But even then it will vary from minute to minute as normal currencies do.
The stability of real and widely use will make it stable in price. At the moment the use is far from stable and so is its worth. This will take time!!!
Later the deflation will be around the average increase of the economic growth on earth (in case of decrease => inflation).

I think one reason governments don't like deflating currencies is because then they can't pay back their liabilities (because the worth of the money they have to pay back increases) or they have to increase the taxes much, what people (voters) don't like!!! For a government it's easier to let the worth of the money decrease by inflation, then increase the taxes to solve the financial problems. Normally central banks do the money regulation so the politicians are not the bogeymen, but when increasing taxes they are.
Using a deflating currency will force governments to increase taxes or they will not be able to fulfill their social obligations. But it will also give incentive to governments to save money because its better for them to hold the money and spend it later, the opposite behavior as at the moment! I think also in this point (taxes/real social costs) BTC can be a more honest/clearer currency then the currencies nowadays.

Give BTC a chance!