That isn't simple economics its a circular argument. IF bitcoin's most optimal and valuable use case is to transact then we might be able to see a fee increase would negatively affect its utility as such and that this would discourage use.
But bitcoin can serve a different purpose which is a fairly stable value settlement system for meta-players (ie big banks), and this would serve a valuable purpose as well.
Your argument is premised on the former and ignores the possibility of the latter. In regard to the latter bitcoin's other advantage you are ignoring is that it is far more secure in regard to its value proposition than any other coin. Ethereum is far from mature in the security sense and they still have to get to PoS which is uncharted water, it hasn't been scientifically tested/proved.
It's not scientific to not consider a different possibly valid perspective.
NXT is 100% Proof-of-Stake, no inflation currency/platform. It has been in production since late 2013.
Research papers and tools can be found here:
https://github.com/ConsensusResearchIf you haven't read about it, doesn't mean it doesn't exist.
Bitcoin should draw from the Proof-of-Stake coins experience and implement a hybrid PoW/PoS to be more secure and not depend on miners so much. The sufferings will continue if users don't have any power over consensus. Proof-of-Stake coins give power back to users.