Viability of Bitcoin due to transaction fee?
Relative economic advantage

As you've noted, transaction fees are paid for block space and not relative to the amount that is transferred. This causes an obvious economic advantage to larger value transfers and would inevitably push out smaller transfers if supply remains the same and demand increases.

Supply increase

This is why for several years, there have been proposals to increase the blockspace supply. This would probably mitigate the problem in the short term, however would probably quickly reestablish the same problem at a lower fee level that would continue to rise as demand catches up.

There have been some proposals to create automatically adapting blocksizes, but these proposals have so far been incomplete and especially deficient in providing a mechanism to push for blocksize decreases. The latter is important to actually achieve a self-balancing system as a quickly growing blocksize would cause other parts of the system to fail due to vastly driving up the cost-of-node-option.

Demand management

The other side of increasing the supply would be to manage the demand. This has happened in the past to some degree by transactions moving offchain, e.g. into third party custodial wallets such as the service ChangeTip that facilitated tipping internet contributions or wallets such as Coinbase. A lot of work has gone into a decentralized second layer that basically acts as a aggregation layer for transactions. This Lightning Network is thought to settle on a fee system relative to the transferred value as the costs of relaying payments scale with the amount transferred. If it should gain widespread use it is expected to provide a haven for small value transactions that automatically rebalances with on-chain demand.