Now you have a currency that increases in value slowly over time.
Any arguments to support this statement?
it may turn deflationary at some point in the middle if the loss of bitcoin addresses exceeds the creation of new coins.
To avoid this just don't lose your bitcoins! Simple as that. What happens now if you literally burn a 100 dollar bill? Is there someone that would mercifully compensate you?
Burning US money is harder then you might think.