I largely agree with your analysis. What I don't agree with is your assertion that it is sufficient to only control the increase in supply. If the market values the coin less than $10, there is no mechanism to compensate and the price has the potential to crash to $0, or worse, to slowly bleed in value over years towards $0.
I tried to explain that with a non-backed asset, that is a potential outcome that is unavoidable. If people decide collectively that your coin is worth shit, it will be worth shit. No matter what mechanism.
There must be some way to reward holders of the coin when the market price falls under $10, such that it becomes attractive to be a holder, therefore pushing the price back up.
Well, apart from a speculative hope, which is there, there's nothing you can do. And that speculative hope IS there: when the coin is below $10 on the market, you know that nobody is going to make any. No "reward" mechanism can do better than that as long as the reward mechanism is internal, that is, in coins. If it is external, that's what "backing" means of course. If you can redeem your coin for 2 giant pizza, it will always be worth AT LEAST the value of 2 giant pizza. But if you can redeem your coin against nothing else, which is exactly what a non-backed asset is all about, the BEST way you can do is NOT to make more of them.
What else could you do ? Destroy coins ? Coins that people possess ? That's worse.
So, in my proposition, when the market price is below the PoW cost, I have the HIGHEST possible motivation: no more coins are emitted. That's the best you can do without backing.
Of course, I see what you think. You take away the dream of MOON!! But the dream of MOON!! is making the thing in a greater fool game, as we saw. The dream of MOON!! makes that it cannot become money.
I would even say that the expectation of constant value (or slightly rising value) makes it a much better store of value than a thing that goes MOON!! and back down again. You take away a lot of risk, so you don't care using it to buy and sell stuff.
I wouldn't want to get my salary in a fixed amount of bitcoin, contractually written down. I wouldn't want to write a contract in bitcoin. In both cases, I could be ruined in as much as I could become rich. As I said somewhere, if you had sold your house for bitcoin in December last year, because you wanted to buy another house right now, after having gone on a world trip, you can only buy a small flat. You've divided the value of your house by 3. On the other hand, if you would have signed a contract last year in January of a monthly salary in bitcoin with your cleaning lady at 1 BTC per month, you would have been paying her some $15000 or so for December. That's not money, and bitcoin will never be used as money because of that.
If you know that, give or take, your coins are going to be worth $10 in the beginning of the year, and maybe $9.5 or $10.5 at the end, well, things are different. You CAN use them. And because of that, these coins start acquiring real UTILITY value ; they are not a purely speculative asset any more, because they now have the economic utility of money (that is, of reliable transporter of value over time). That's what bitcoin pretended to be, but its monetary policy was entirely wrong for that.
So instead of the illusion of MOON!!, we get the rational expectation of genuine economic utility. That's a more solid basis I think in the long run.