It is true that price deflation encourages hoarding. But that's why merchants will have to accept other currencies to keep on selling.
That currency competition will decrease the value of bitcoin as a medium of exchange, decreasing demand, decreasing deflation.
Since bitcoin is not the only currency on earth, deflation can't kill it.
Well said. Although let's hope one of these other competing currencies aren't bitcoin v2.0 with speculation and deflation proof features.