You all never take in account that in fact collateral is not excluded from circulation and until no critical demand on it from stablecoin holders this collateral can participate in economy partly or even completely thus multiplying a total money supply...
Correct! More informed users already know that USDT, for example, is still run on fractional reserves. However, some people still believe it's legit because they promised (in the beginning) that USDT is backed by actual USD. This was the reason it could grow and become mainstream. However, I believe it will crash at some point, just like other examples in history.
But about the case that you are promoting a stablecoin without some sort of pegging mechanism, and the fact that the mechanism involves burning ETH, won't convince investors.