What I find amazing is that I see threads suggesting Greece adopts Bitcoin, and yet we're still discussing 7 transactions per second like it's a useful figure with any widespread adoption.

That's just a rant though, I can't prove that there's uses of Bitcoin that would exist if it wasn't for the block size limit. What I can assert confidently is that 7 transactions per second is laughably small, even for a purely settlement platform (i.e. if it was only used by large institutions), and while sidechains/off-chain transactions will have to be part of a complete solution, we need something before they'll be ready, and we need more throughput even just to interconnect the networks that handle the majority of transactions.

To summarise points to date:

1. Miners need to start considering which transactions they accept into blocks more carefully. Infrastructure support cost should be part of the consideration of which transactions are worth mining. Most miners (AFAIK) now run custom software, so this is something they need to do for themselves.
2. In doing this, miners should control block size, with the limit imposed by the network acting only as a hard-cap. 2b. If miner bandwidth is a major concern, ESPECIALLY if it's because they're in one geographic location, we probably have a major netsplit risk that we're not talking about enough.
3. We probably will need a better way of propagating blocks than all at once. Gavin's suggestion of O(1) block propagation is ideal, although if no-one actually finishes the work, even one of the other improvements suggested (such as "I know you have") would be better. Latest work I can find on O(1) block propagation: http://rustyrussell.github.io/pettycoin/2014/11/05/Playing-with-invertible-bloom-lookup-tables-and-bitcoin-transactions.html
4. So far, I really like the idea of scaling max block size depending on historical block size. This avoids future problems, while also not simply adding an order of magnitude to the limit in one big-bang. The difficulty is in determining the right model for this.