We are having a tx jam right now, so by not increasing the blocksize limit, Blockstream/Core either have absolutely no idea what they're doing, or they're just pricks blatantly lying their asses off.
They want full blocks and a fee market because the block subsidies are diminishing.
We'll only be mining 112.5 new bitcoins a day in the year 2036, so obviously that's more
important than making sure the network runs smoothly today.
We don't want to attract as many users as possible so that by the time fees become
important, there will be massive transaction volume. Instead, its surely better to just make fees expensive now
(doesn't matter if the competition has cheap fees).. because we need to establish
this fee market, you see... and get people used to high bitcoin fees.
in the future we'll be able to get more users or just jack up the fees even more.