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The difficulty is where the security comes from. Bitcoin's goal is to have the highest possible prices and difficulty so that nation-states and alien civilizations can't hack it. It's very easy to have a cheap low-difficulty coin. Equally worthless too. You need to understand that proof-of-work is actually proof-of-waste - the waste, the difficulty, the cost, is the security.

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You've misunderstood my point: I'm not talking about reducing the difficulty, I'm talking about (sub-linearly) increasing the mining reward as the difficulty grow.

Also the difficulty scaling is important even if you don't take security into account: if you don't raise it, then the block mining frequency rise progressively, and then you end up with more and more orphaned blocks, until you end up with parallel chains that don't really converge to a single coherent one.

I see what you mean now. Interesting thought to peg inflation to difficulty. I think the main issue is that Bitcoin is not, and will not be, a means of payment. So price stability doesn't matter much. The nature of the system favors few, large transactions. The small-block size crystalized that. Bitcoin is truly suited as a clearing layer. Eventually it will process just the largest most expensive transactions in the world. Which is good since that's the only way miners will get paid and the high transaction costs will ensure continued security.

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