How Much: calculating...
Let me remind you of @kjj idea, which I find interesting:
When we do need to increase the limit, I would propose the following rules: Block max size increases iff at the time of difficulty change, the sum of the size of the last 2016 blocks is > (1814 * block_max_size). If size increase is indicated, block_max_size+=(block_max_size>>4). I'll leave the implications as an exercise for the reader. 1814 and 4 are magic numbers, they could be changed, but I suggest they not be any smaller than specified.
Though I would consider adding some high hard limit too (100MB-1GB)
Upon further reflection, I now feel that 1814 is too small of a number. 1915 would be better, possibly even higher.
In regards to all of the talk about banning encryption, I guess no one remembers the 90s any more. The cypherpunks
won that battle
in the past. The genie is out so far now that no one even remembers that there was a lamp before.