All the lost Bitcoin only mean a lower maximum supply. That means that the price of Bitcoin will go up. Less supply and more demand is just what we need. In fact, this will continue happening and Bitcoin will continue rising because of this. There is absolutely nothing wrong with this. Think of it this way: If a Bitcoiner loses his coins because they died or lost access to their wallet, all hodlers receive a kind of inheritence, automatically.

Is that not a great thing?

We should not change anything about this.