By the time a hard fork can happen, I expect average block size will be above 500K.

Yes, possibly.
 
Would you support a rule that was "larger of 1MB or 2x average size" ? That is strictly better than the situation we're in today.

It is, but only by a trivial amount - hitting the limit is still very likely. I don't want to see this issue come up over and over again. Ideally never. We shouldn't be artificially throttling organic growth of the network, especially not by accident.

IMO it's not even clear there needs to be a size limit at all. Currently the 32mb message cap imposes one anyway, but if miners can always just discourage blocks over some particular size if they want to.

But I can get behind a 20mb limit (or 20mb+N) as it represents a reasonable compromise: the limit still exists, it's far below VISA capacity etc, but it should also free up enough space that everyone can get back to what we should be focusing on, which is user growth!