Adjustable block size We know that PoW difficulty is adjusted s.t a block is found roughly in every 10 minute. So, if nodes happen to mine a block too fast, difficulty is increased and vice versa.

I wonder if it's possible to apply the same mechanism to block size. I'd guess huge block sizes are bad in general as it takes longer to propagate them however, we also know that at certain intervals there are lots of unprocessed txs. So, would it make sense to increase block sizes at least for these intervals and decrease afterwards? Would such mechanism might help Bitcoin in a way ?
So, would it make sense to increase block sizes at least for these intervals and decrease afterwards?


The key problem here is miners can introduce transactions in a block for free. In other words, miners can create lots of transactions with high fees for free. And there is no easy way to distinguish these transactions from regular legitimate  user transactions. Therefore, there is no easy way to measure the actual demand of unprocessed txs. This essentially provides block-space for free to miners and opens up DoS attacks. 


  Would such mechanism might help Bitcoin in a way ?


Such a mechanism would certainly be helpful, but as pointed above there is no easy to make it work.