The system at the very least needs a way to liberate lost coins.
Coins that stay dormant for say 100 years are divided up among all current users? Is something like that possible?
It's certainly conceivable that if at some point the community perceives it to be a problem, then a majority of bitcoin clients/miners would be patched such that coins that have been dormant for that long get added in some fair fashion to the transaction fees being collected by the miners, and open clients will move coins to new addresses randomly every few years to ensure that their coins stay active. But I don't think it's anything that needs to be worried about right now.
Sounds like a good solution, the key is how to reintroduce the lost coins back into the system in a fair and democratic manner.
Money has two attributes: media of exchange, and store of value; as long as the system can foster participants' trust and perception of value, fairness, there should be acceptable solutions to this kind of problem.