In my opinion it would kill terracoin as someone could point the full force of several rigs/asic as long as the difficulty is low. When it goes back up, they would switch to other currencies as it is no longer profitable to keep them running on terracoin. As soon as it goes away and everybody else is left working a lot for peanuts. Repeating this several times will grind terracoin to a halt.
If you follow the fluctuations in the hash rate of terracoins, it is already happening. So, instead of just a few people doing this, the entire community should do it. The result is that after some fluctuation, the difficulty would reach a more-or-less stable point, because the difficulty where profitability of terracoin is equal to the profitability of bitcoin is publicly known.
Right now, the difficulty goes up to 60K and then down to 8K, and up again, etc. If people bailed out from mining already around 30-35K of difficulty, and returned when the difficulty is again below 30K (or at least a large portion of people would do that), then the equilibrium could be reached.
Am I mistaken?