I don't think destroying coins through higher MTR will cause the spiral you predict.
If the transaction fees are increased to avoid inflation, then it will cause people to avoid transactions. However, it would also cause people to ask more for their coins to cover the transaction fee which would cause deflation which is the goal of increasing the transaction fee in the first place. The would break the transaction fee death spiral and stabilize the price of the coin.
Actually, the transaction fee may never get paid if the threat of a transaction fee causes people to hoard Stablecoin and drive prices back up.
Maybe you're right and this can work only with fees.
With demurrage you still have direct control of how much will be destroyed while with MTR you don't.
Also the increased velocity amplifies the effects on price that money creation/destruction produces. So you have to create/destroy less quantity to achieve the same effect.