The (declining) subsidy gives the network time to grow the the volume levels where fees would make it self sufficient.
This is a very good point. I expected the fees to be somewhat higher than in Bitcoin, but if they are so high that it makes transactions almost impossible, the network is useless. I should do some calculations on that. But dont forget: the lottery gives all the fees back in the reward, so even very high fees dont matter that much, since it will also mean the subsidy for making a transaction will increase, cancelling eachother out.
Please describe in exact details how you would distribute 25 BTC "randomly" in such a manner that it would be fair. Hint: if you could solve that problem (sybil attack) you wouldn't need mining at all.
It will not be 25 BTC fixed, it will vary depending on the fees. And the lottery is not ment to prevent sybil attacks, since it doesnt replace mining. And the selection of the random addresses can be done using the blockhash fairly simple. If you want I can give you a technical implementation of it, but it goes out of the scope of the topic I guess.