I for one think the extra traffic is REALLY needed for the bitcoin ecosystem. If it ever starts really catching as a medium of dominant exchange, even locally, 20,000 transactions per 24 hour period is only a small portion of what is actually needed.

I think we will need to move to an increasingly thin-client based model, but perhaps allow blockchain verification to occur occasionally, e.g. once a month, locally running through all the transactions since my last verification locally, and verify that it all makes sense (e.g. hashes line up, transaction input is all available, etc.). Then the thin-client could have a 'last trusted block hash' and servers can provide merkle trees to provide verified balances, etc.  This would make the system more like an open-book, transactionally peer-to-peer, and crypto-hard-to-forge version of a banking system, but it makes sense to me to move in that direction.

-s