As far as [1]-scaling the blockchain goes, there's no amount of native scaling you can do that can ever meet the capacity or functionality requirements of a mature economy that uses your currency as a denomination. For example, just take the cryptocurrency exchanges of today. All trades are instant, regardless of the performance of the respective blockchains of the currencies being traded.
I do not agree with this statement, since a blockchain only needs to scale up just enough in order to meet the current demand, over time technological progression might even match up with the adoption curve. If this does not happen then off chain solutions and alternative cryptocurrencies can take some of that volume, however it would be wrong to unnecessarily restrict the capacity of any blockchain in order to favor off chain solutions. Which is what is currently happening to Bitcoin.Retail is always gonna use "off-chain" transaction handling simply because it's an application in its own right. e.g. a Supermarket has a great big SQL server in a back room (or data centre) connected to the cash tills at one end and the Visa network at the other that's capable of all kinds of stuff that a blockchain just is not equipped for. Things like instant reversals cos your cornflakes got rung through on the other customer's bill, discounts, store card stuff and wotnot.
Some retailers might choose to accept cryptocurrency directly, that is up to the individual retailer. I help manage a retail store myself and we accept both Bitcoin and Dash directly. However you do make a good point that some retailers would indeed prefer their own off chain transaction handling. This does not mean however that retail can not be a good application for cryptocurrency, I personally think it works great in retail situations, and I suspect that over time blockchains will be able to handle whatever we throw at them. There was a recent talk by Andreas where he argued that the internet has failed to scale over the last twenty years, yet here we are today with YouTube, file sharing and Netflix.https://www.youtube.com/watch?v=bFOFqNKKns0
This is more about creating 2nd and 3rd monetary tiers (in the fiat world these are the credit tiers which basically form 80% of the money supply, in other words, the main part of it). These tiers are the "promissory notes" that Justus Ranvier was talking about.
Clearly, higher order monetary tiers are instant by their nature (because we're just talking about moving numbers around, not blockchain transactions). Any level of adoption will naturally result in the growth of these additional tiers - thats just how all economies work - so scaling kind of takes care of itself in that respect.
These "higher" monetary tiers, often using IOU's is historically where inflation has been introduced to commodity currencies. I do agree that any level of adoption would indeed naturally result in the growth of these additional tiers, however the more a cryptocurrency can scale on chain the better. Since it is this on chain capacity that for a large part determines its utility and it is this utility that plays an important role in giving any cryptocurrency value while allowing it to compete with other cryptocurrencies.Clearly, higher order monetary tiers are instant by their nature (because we're just talking about moving numbers around, not blockchain transactions). Any level of adoption will naturally result in the growth of these additional tiers - thats just how all economies work - so scaling kind of takes care of itself in that respect.
Thats why I think the point at which you scale the native blockchain to is largely arbitrary.
I would disagree with this, since the potential scale of any blockchain is what in part determines its utility, the viability of any cryptocurrency is linked to this utility since its security is also based on the value of the block reward. Which is why I can argue that Dash has eight fold the potential utility then Bitcoin has because it has eight fold the capacity of Bitcoin. Dash can support a far greater volume of economic activity, which makes it a superior cryptocurrency.The thing that's important however IMO is that its universally accessible (in the way that - even though I've got all my money in a bank account, I can always get it in paper notes to hold in my hand if I want).
This is where scaling a blockchain becomes very important, since if a cryptocurrency does not scale in the face of increased adoption then the transaction fees would increase. If the fees become prohibitively expensive then it damages its use as a currency. Exactly because it becomes less accessible for most people as a currency. Thats the minimum level of scaling that a blockchain needs IMO. (i.e. that you can access it directly with a wallet client as you can today, without dependency on a 3rd party).
I would agree with this statement, and I would consider unnecessarily restricting a blockchain so that fees become prohibitively expensive for use as a currency so that such use cases only become viable with the help of third parties. I would consider this a case where the primary use case, utility and value proposition of cryptocurrency has actually been broken. Blockchains don't have to handle (and probably will never be asked to handle) realtime commercial trades to any industrial extent, any more than the bank clearing network does today.
I agree that our technology today would not allow a single blockchain to take on the type of volume that you are describing, though I suspect that in the future as technology progresses this will become more possible, just like we saw with the early internet, which many experts claimed would never be able to scale. 
I'll probably start everything over again from scratch 
