I do not think you know the meaning of that word. There are numerous reasons the block size is constrained.
To be precise, the 250KB soft-limit is entirely artificial. In my opinion the 1MB limit is artificial as well, but I do understand some of the reasons to have some constraints on it. I'm however radically against keeping it at 1MB forever.
The default fee is about US$.02. International wires cost about $50 and take days to process. Yes, $.02 isn't enough for a international currency transfer averaging 10 minutes. Increase the default fee from BTC .0005 to BTC .01 and the blocks will have plenty of room for everyone's transactions.
It's very convenient of you to choose the most inefficient money transfer mechanism available as a comparison. Let's compare this to the European International SEPA bank transfer system. Transfers take usually 1 day to any country these days, and the cost for individuals is 0,0 EUR per transfer. Monthly fees may apply.
The cost for companies in Finland is approximately 0,15€ per transfer, with some banks it's also 0. Our company has 3 bank accounts, one of them only has a monthly fixed fee regardless of the amount of SEPA transfers, the other two have 0,15€ per transfer. And as a reminder again, for non-companies the fees are usually 0. The fees are the same with any amount.
Even if we take the 0,15€ as a baseline, the fees can rise a bit though. In any case, for Europeans the need for SEPA transfers radically exceeds the need for wire transfers. I just think that even 0,15€ is way too much, for me the baseline is how much does a 1€ transaction cost. I'd say an acceptable fee is 2% for that size, which is 0,02€.
At current market price 0.0005 is 0,015€ which is very close to what I'd consider the maximum acceptable fee. Any higher than where we are now, and Bitcoin's usability for small transactions is destroyed. This fee could perhaps be as high as 5% for a 1€ transactions but around that mark is the max, if one wants to give Bitcoin a shot at handling small tx. I'm not even talking about micro-tx, I personally think aiming at handling below 1€ tx should be abandoned.
The one and only problem is the block size which is simply way too low to support scaling of any kind. This is not a question of all or nothing, Bitcoin will certainly not be used for all micro transactions in the world, but if it can't be used for $1 transactions and cheaply, it's absolutely doomed.
This year there needs to be concrete progress in the plan to raise the block size, otherwise I'm abandoning ship for certain. My view is that this particular issue is THE issue as far as Bitcoin is concerned right now. My only real concern, to be honest.