Will Deflation Destroy Bitcoin?

Krugman wrote a column on BitCoin: http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfett...

He predicts failure by asserting its algorithmic scarcity results in an ultimately deflationary currency which will result in hoarding and not spending money on goods, and uses it as a proxy for arguing against returning the USD to a gold standard.

I thought the first answer was an interesting repudiation regarding currency divisibility and effects of deflation. I think it's interesting that although prices for computing power are massively deflationary, consumers continue to keep buying faster computers every few years.