Unfortunately, there is still a difficult balance between burns and network efficiency. Although the 0.51% annual increase doesn't represent significant inflation and fees are low, the price/blockchain activity isn't reacting well to this news.
I believe the transition to a POS has harmed the network.
An increase of 0.51% doesn't mean supply is increasing much but it also means that there is no reduction in huge amount of ethereums that are in circulation. There are 120 million etherum coins in circulation and this annual increase will kill one of core objectives of switching to PoS which is to reduce the number of Ethereum coins in circulation.