If it reaches $1 trillion, what happens? $10 trillion? If it turns out everyone moves all their money over to Bitcoin because they're afraid of their fiat currency becoming worthless, how is that going to be a good thing?

Inflation of the dollar will skyrocket and anyone who wasn't holding bitcoin is going to get fucked. How is this going to end well?

Even for the bitcoin holders. If the economy is fucked from inflation and a car costs 50 bitcoins or $50 million of Fiat dollars... that's not going to be a good time for anyone.