As block reward decreases, miners will be dependent on transaction fees to suffice for their electricity costs. By then, if the price of Bitcoin isn't high enough, it will lead to a further reduction as miners abandon their business because of the lack of profit. Thus it could be said that Bitcoin can either do very well or collapse completely in 2140.
Doesn't the Bitcoin system fail in this way or are there any other variables in play that stop such a breakdown?
I don't think that bitcoin will collapses in the near future. Because as we can see now into bitcoin, the price value is amazing its getting increases more and more. Aside from that many investors are also coming in into bitcoin together with the merchants in the entire world.