Are there people who think "I've got 50 bucks! You know what, I've a notion to buy some bitcoins. How much would I get? Oh no! Only 83 millibitcoins I guess I just won't bother."? I guess there might be, but it's presumably a fairly small demographic. Surely most people buying BTC have some reason for buying it - they'll want to buy something that's priced in BTC, or they'll be looking into BTC as an investment and they'll have some idea how much they plan to invest, and how much it costs in fiat, etc. I'd hope these latter two groups would base decisions on more practical matters than perceptions of size.

To be honest, though, I think this is all moot - we will adopt conventions like you suggest, and others. Different groups of people using Bitcoin will use different conventions. Already there's a whole community of people thinking in terms of "Satoshis". I tend to think in terms of BTC (force of habit), but people are clearly starting to think of mBTC. And that's fine! It's all nice and decentralised. The OP suggested a technical solution; I believe that if there is a problem it's a social problem, and one for which we don't need a centralised, imposed solution.