The biggest problem with deflation is debt accumulation. With deflation any debt is more expensive to pay off than the value of the goods originally obtained with said debt.
Since the deflation in bitcoins is predictable, a bitcoin's value today already includes the present value of holding the bitcoin as it deflates. There can't be a significant actual increase in value just from predictable factors.
To give an analogy, suppose everyone knew for a fact that gold would hit $2,500/oz in two years. What would happen to the price of gold today? The assumption that something will go way up in value in the future will cause it to go way up in value today, preventing the future rise because it will have already happened.
So then would it be necessary for there to be a standard of living decrease? Or would jobs just hire you way under what your currently worth to try and get you to stay around? Either way it still seems like a problem similar to inflationary economies, just in reverse.