Perhaps there are two disagreements here:
1. Is a mildly-inflating currency better or worse than a fixed-supply currency?
2. It is possible to inflate a currency without having to trust a central planner?
The answer to #2 is "YES". If you modify bitcoin to have a constant % block reward then what you get is a forever-inflating currency. But if this were the case, we would also know for a fact that the freshly-printed money would go entirely to garbage output (miners will simply consume electricity [natural resources] faster than is required to secure the network).
So, to have any hope of not wasting the extra money inflation, you must argue that the central planner is not only wiser than the free-market, but vastly wiser to turn a net waste into a net gain. This is a tenable position in my opinion, and I think the answer to #1 is "WORSE."
Hmm, maybe we can put this into a theorem. Still half-baked, but here's a start:
Peter R's Theorem on Monetary Inflation for Fully-Adopted Currencies
Money created by a trustless currency by way of inflation goes entirely to exploiting natural resources.
Corollary #1
An inflating currency that is not provably inferior to its fixed-supply equivalent requires trust in a central planner.
Corollary #2
An inflating currency is superior to its fixed-supply equivalent if and only if the unproveable efficiencies made possible by the wisdom of the central planners outweighs the loss of monetary freedom that placing trust in central planners entails.
1. Inflation could also run with a fixed supply. Fixed supply means that there is no consideration about the present economic situation when regarding money circulation. That there is one unchangeable static rule in which new money is added to the circulation.
It doesn't work in creating a stable currency, because economic growth is not fixed. The availability of important strategic resources like fossil fuels is always changing together with production capacity. The modern finance is built in a way that money changes by following the economy, so the money in circulation is in balance with the economic development. If you keep the money supply static, while the economic growth is dynamic as usual, then the outcome is an unstable currency with constantly changing prices. You could say that people could manage this when there is a new quick IT based system to keep the prices dynamic, but it creates load of unpleasant problems and difficulties, especially with financial planning. Value of currency has to be stable, so it would be predictable and plans could be made based on these predictions.
2. I think that it is certainly possible to create an inflationary currency without a central planner. Like you said before, it could be easily done by just couple of changes from todays cryptos code to create inflation. But what remains, is the fixed supply, that is The difficult problem. I would even give it a try to a stable 1% year deflation, but fixed supply is what would create financial havoc.
I think that the answer for stable inflation vs stable deflation problem isn't very clear because it hasn't been tested in the modern world. But the answer from fixed money supply model vs dynamic supply model isn't hard. Fixed money supply is too simplistic to enable currency value stability in modern global trade.
With bitcoin, the most important flaw isn't deflation per se, but the rate in which deflation is created. Bitcoin was created to have a strong starting momentum, with attracting people to adopt because it will be much harder to adopt later. That is why the supply is 50% coins in 5 years, and the rest in 120 years. I would give bitcoin a chance if the deflation rate wouldn't be this steep, but with this curve it won't ever be an serious financial tool. The first users will adopt because of greed, and the later users won't adopt because of that same greed. It will mostly be a get-rich-quick tool for gamblers, and will be far from being a serious currency.
But I won't get tired of repeating that it doesn't mean that we should laugh at the entire idea. The idea of creating an transparent open sourced monetary system, that is supported by the internet, is a major leap in the evolution of finance. The future will probably bring forward currencies that have the complexities needed to be a quality currency in the world of modern global trade. But the difference between bitcoin and this "future currency", is like between the first digital calculators and todays PCs. If bitcoin can't handle the complexities, then it doesn't mean that no open-sourced digital currency can't do it also.