That means that if block subsidy was cut off completely, then the hashrate would probably drop by 90 to 95%, from currently around 600 Eh/s to perhaps 50-70 Eh/s. You may say that's dramatic, but that is approximately the hashrate Bitcoin had in 2018/19 (
see this chart), and Bitcoin was considered safe at this time too.
It was safe at that time because it was technically and economically difficult to operate another 30-40 EH/s back in 2018. In today's world, that's the worth of a single farm. Of course, that doesn’t mean if we drop to 50 EH the next month, someone with 30 EH would attempt an attack on the network. It would be very difficult to make a profit from an attack of such kind, unless done for the sole purpose of damaging Bitcoin, like a government or a huge bank.
In general I think a 10MB Bitcoin chain should still be ok. But it would harm the fee market (transaction fees would probably go back close to 1 sat/vByte) and thus miner income.
That's one assumption. The other assumption is that when it becomes cheaper to transact on the blockchain, more people will start to use it.
My take on the subject is that increasing the block size will happen at some point in the far future. The main excuse we had to delay that was the fact that many blocks were not even close to full. This is changing quickly, which means there is more constant demand for block space than we have available. Obviously, I am against something as extreme as BSV's infinite block size, but something closer to what you suggested would do just fine, in my opinion.
One reason why a block size increase hasn't happened and won't happen soon is that CHANGE is hard. Some people can’t imagine how difficult it is to change a tiny part of a local live app, let alone a huge change in a massive decentralized ecosystem like Bitcoin. There will be a lot of work involved, many risks, probably drama, and even death threats. Whoever wants to pursue this needs to lobby for months, convince all the pools and major players to accept the change, and assure them of a smooth transition. In other words, it's going to take some serious guts to do so.