If you think of someone losing access to a wallet with 100 bitcoins in it, then there is subtle deflation from time to time already, as it would take half an hour to replace that loss but the loss happens instantly.
Wait a min! Replace that loss? Once the private key is lost, any "coins" (really, transactions in the blockchain) encrypted by that private key are "gone" (really, frozen from being spent) forever, there's no replacing them.