Bitcoins do not have to be lost to be out of circulation. Every coin that are hoarded and not available at any given time, should be regarded as not in circulation. Millions of people are storing coins in cold storage and these coins are not in circulation.
The total coins in circulation cannot be determined, because you have people that are trading coins on a person to person basis. These coins are not going through centralized services, like exchanges or payment processors and cannot be recorded at any given moment.
Yeah, I do believe in this logic. Just like on stocks exchanges, stocks that are not circulating are those that are being held. If we mean by circulating, it's being used as payment, being transacted, etc.