So in essence the value of tx fees (even if the amount of bitcoin for the tx fee) are going to increase to cover the lack of block reward. So if we paid a $10 tx fee before, after the halving it would rise to around $20. So then the problem arises as you mentioned for micro transactions we can't really use Bitcoin. Thus wouldn't Bitcoin lose its utility as a currency?
Unless we start thinking of currency in terms of Bitcoin instead of converting it to dollars in our heads. In this case tx fees don't really change when block reward stops, they stay similar in terms of amount in BTC.
Just like I said it depends if we continue to have this upward movement of bitcoin price over the years that’s when we will say the price of bitcoin will try to cover for the lack of block subsidy, but still it wouldn’t totally covers the incentive except the charge for the transaction fees is very high like the ones we experienced during the end of last year which even put the transaction fees for a particular block to be higher than that block subsidy. But as for regular transaction fee charges no it wouldn’t cover totally.
Why I brought the bitcoin price to cover for the halving of block rewards is because the past trend have actually proven that. Take for an example the block reward now is 6.25 which on current bitcoin is equivalent to $260k when the reward gets halved to 3.125 and we possibly see a bitcoin price raise to something like a $100 then it’s equivalent will be $312k which is higher than now.