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Why do you want miners to have an incentive to make smaller blocks?
Smaller blocks means fewer transactions, so fewer opportunities to collect fees, so less profit.
Miner profit in fiat currency = number of transactions * average transaction fee * btc-to-fiat exchange rate
Experience (and common sense) says that more usage of Bitcoin means a higher btc-to-fiat exchange rate, so if you want to maximize miner's fee revenue then increasing the number of transactions is the obvious way to do it.
If you think that putting an artificial cap on the number of transactions will increase overall miner profit, then I urge you to find a Real Economist and talk to them about the wisdom of trying to use production quotas to keep prices artificially high.