"The block transaction cap is just a hardcoded value in the client"
Why is these even a value? Why does the protocol limit how many transactions can be performed in a given period of time? This seems like an extreme deficiency to me...
Many reasons are outlined in the link of the grandparent's post. https://en.bitcoin.it/wiki/Scalability (Check out the rest of the wiki, it's quite informative.)
To summarize: It helps reduce some DoS attack vectors and helps encourage the use of transaction fees early on.
The fact that there is a risk of a DoS attack without hard-coded limits on global transaction volume sounds like a much deeper flaw in the design of Bitcoin. It is particularly troublesome given the existence of protocols that do not have this problem, like Chaum's offline digital cash systems (which have been extensively researched by cryptographers).
What is Bitcoin's excuse for this problem? Surely it cannot be that a goal of Bitcoin is to remove central authorities, if some central team of developers has the power to change this system parameter at will. I suppose the only real excuse is that Satoshi was not even aware of that body of work, which would not be all that shocking given the fact that it is not even cited in the Bitcoin paper.
I don't think Bitcoin is even trying to solve the same problem Chaum's ecash was. Bitcoin is about creating a distributed, consistent transaction ledger; ecash is more like a conditionally anonymized electronic certified check.
Why is these even a value? Why does the protocol limit how many transactions can be performed in a given period of time? This seems like an extreme deficiency to me...