Higher transaction fees means less people can use bitcoin as a medium of exchange which is a pretty good reason to assume that it would reduce it's utility.
I wanted to point, that there's lightning adoption which means that higher transaction fees temporarily don't necessarily reduce its utility. At least not to everybody. I think it's obvious that bitcoin will never replace the dollar/EUR/YEN, etc or even come close to that but it could be useful for some type of transactions
Famous last words... 
Since scability is not a real issue, the LN doesn't accomplish anything
How's scalability not a real issue? The lightning network was made, because scalability is a very real issue and any block size increase is just a temporary solution.