this is partly true, those KARM will hit market. KarmaShares own them and will sell them sooner or later. So they are not burned. Proof of Burn is awesome way how to make coin more valuable. Problem is, that is that it just sucks liquidity from the market. Since total coin market cap is still same, new investors will not be attracted anyway. Lowering total number of coins is much better.
I would tend to agree however.. if you lower the total number of coins all you are doing is reducing the security of the network over time.
this is why the coin supply can't be lowered too much.
by burning the coins, however you do it.. you are ensuring that some coins at least are being taken out of circulation permanently.. just as bank notes and coins might wear out or be lost over time.
the more coins you burn the more new ones you can create without upsetting that delicate balance of security vs oversupply.
proof of burn is more about showing the developers/early adopters commitment to the cause and to fair initial distribution than it is about increasing the value of the coins that remain. This helps to reduce the pump and dump phenomena because by burning the coins the devs are making real sacrifices to initiate the new project.