So when bitcoins lost forever, the total supply of bit coins will be reduced? Or the lost bitcoins will be generated again in the future?
Or they become a dead weight, forever associated with lost wallet? 

And if so, eventually more and more bitcoins will get lost, due to computer failure or confiscations by the Government.
Or by solar flare (magnetic storms) destroying data etc.   

Supply of Gold slowly grows, but once all bitcoins had been mined, they will start to slowly disappear.
Am I understanding this correctly?