I totally agree with your post.
I will add, though, that the proposal to let the number of coins increase to keep inflation near 0 is not easy. That is the job of the Federal Reserve, and we have a whole governmental entity devoted to it. If you could solve that algorithmically, you'd have a Nobel Prize.
It is the right thing to do; it's just not easy.
That being said, does the math behind bitcoin depend on their being a hard limit to the number of coins? Could I start my own foocoin (i.e. a new bitcoin root) with a larger limit? At what point does the cryptography break, or does it? Can I have no limit? If it is the case that you can start your own bitcoin root with no limit on the number of coins, then eventually the government will do so, declaring by fiat that that electronic currency is now the official electronic currency (and probably also by fiat equivalent to a physical unit (dollar, dime, penny, whatever)). Thus, I predict that if and when electronic currency starts to become generally accepted, the government will start its own.