Avoid such narrow, binary thinking.

Referencing the problem described in http://gavinandresen.ninja/why-increasing-the-max-block-size-is-urgent  (not the solution - block size change - just the problem, tx/block Poisson mismatch)

This problem - block creation is bursty - is fundamental to bitcoin.  Raising block size does not fix this problem (as [1] notes), but merely kicks the can down the road a bit, by hiding it from users a bit longer.

Bitcoin is a settlement system, at the most fundamental engineering level.  It will never be an instant payment system for all the world's coffees (or all the world's stock trades).  It is left to "Layer 2" projects to engineer around bitcoin's gaps, to produce an instant, secure, trustless, egalitarian payment system using the bitcoin token.  [1] also notes this.

It is therefore not a binary decision of leaving room for other projects, or not.  Layer-2 projects are critical to the success of bitcoin, and complement bitcoin.

[1] http://gavinandresen.ninja/it-must-be-done-but-is-not-a-panacea

Holistic thinking implies you build a full-stack system with bitcoin