"This sounds like a good idea, but won't really change anything since everyone will have to pay the new fees, and it's just an arms race."
I don't think Gavin or anyone else claimed it did. This change is just one of several needed to solve these problems.
"Instead a completely different method should be used: A cleanup cycle where old blocks are consolidated and discarded. (The miners agree that the new block is valid, then the old block is no longer needed.)"
Satoshi described "pruning" in the original whitepaper, and it doesn't require a protocol change.
"Also as a side note bitcoin will never survive past the last mined block."
Fortunately that's at least 100 years away. I think that should be enough time to transition to a different incentive structure.
I don't think Gavin or anyone else claimed it did. This change is just one of several needed to solve these problems.
"Instead a completely different method should be used: A cleanup cycle where old blocks are consolidated and discarded. (The miners agree that the new block is valid, then the old block is no longer needed.)"
Satoshi described "pruning" in the original whitepaper, and it doesn't require a protocol change.
"Also as a side note bitcoin will never survive past the last mined block."
Fortunately that's at least 100 years away. I think that should be enough time to transition to a different incentive structure.