The number of tx per second (and the amount of storage required) is limited by two things; block size and block frequency.  We could double tx per second by doubling blocksize or by doubling block frequency.   Or we could do both and quadruple it.  Of course if we doubled block frequency we'd need to halve block rewards to stay on the same money supply curve.

A lot of the motivation for the 1MB limit was a fear that if it weren't limited we'd have people building gigantic blocks just to clog up the system.  If someone with major hashing power started building giant blocks every time he got a block, he  could DoS the system just by making the block chain too large for most people to store. 

A lot of the motivation for the ten-minute intervals was limiting the amount of storage devoted to block headers.