that is not something that you could leave to an algorithm to automatically decide what the size should be. what if it was too much? what if it was too little? and not to mention that you can't just be abstract and say "algorithmic way", the implementation of such a thing can open up new ways of exploitation by the miners and we don't want that.
with that said i am all for a block size increase. i always say we need "scaling" not just block size increase but with all the scaling that we have received, it was obviously not enough and with the adoption increase there simply is not enough room in blocks to handle that. and if we want to see LN be used more we need to be able to handle all the extra transactions that LN adoption would bring to bitcoin.
Too much isn't a problem, if by that you mean it would be too empty. For most of Bitcoin's life the blocksize has been too much. Was never a problem. Most altcoins that claim high tx/sec have large almost entirely unused blocks, not a problem for them. The only problem for blocksize it too little and it makes the blockchain almost unusable, which is the problem that needs solving, and making sure blocks don't get so big (assuming they are full) that it forces more centralization. But also the reason my idea involves halving of the size increase each time is so that the size increase doesn't run amok and get way too large too fast. Right now we need a good size increase to handle whats gonna happen at the next market peak, likely bitcoin will need a 4x or 8x realistically to not grind to a halt during the next peak. Unfortunately I'm 100% sure there will be no scaling by then which means the tx fees and limited blocksize will likely end the bull market prematurely. Then in the future, as the compounding blocksize increases build upon themselves, we need smaller percentage increases, especially so that the blockchain doesn't become too big and risk centralization. If anything I think my proposal wouldn't be able to keep up with what is needed, but it would alleviate it a lot and the rest could be pushed mostly to the LN, and it would limit centralization from having too large blocks being filled and therefore fewer people can mine or run nodes.
Absolutely, both LN and blocksize increases are absolutely necessary for bitcoin to scale. It is sad that people tend to only think that one of those things is needed (2nd layer or onchain scaling) and they ignore how obviously the other one is needed as well.
The way I see it, LN opens up new possibilities, like everyday $5, $10, $50 transactions, or even microtransactions. These are things that aren't really done currently on bitcoin, as the blocks are currently mostly filled with people just moving money between wallets or exchanges. So the LN does nothing to solve the current problem, but it opens up bitcoin to handle many thousands of everyday transactions per second that aren't currently done. We still need a lot of onchain scaling in the years and decades to come to handle the types of transactions that make sense to do on-chain rather that in the LN. The current blocksize is grossly inadequate for what we should expect for that in the future.