Can a blocksize limit be a sustainable way to introduce scarcity?
Your analysis seems to assume unconfirmed transactions will sit in the queue forever.  That's not the case.  When someone realizes that their transaction will never confirm, they can create a double spend with a higher fee.  When the double spend is confirmed, the earlier transaction becomes invalid (barring a chain reorganization).

I think it's an open question about how much we should be restricting block sizes.  The current hard limit of 1 MB seems to be a comfortable place for miners with current technology and for full node operators with current disk space and bandwidth limitations.  As fast block propagation technology improves, block chain pruning technology gets deployed, and higher-bandwidth connections become more common, we will likely see a push towards higher block size limits.

We will also hopefully see technology and techniques developed that allow for alternative ways to pay for block chain security, so we aren't so dependent on transaction fees.