It isn’t an impossibility, it is, like a pyramid scheme sound until you run out of road. What you are saying is that it will run out of road.
You could say the same applies to life on the planet, that once the limits are reached it must stop, yet it survives and evolves, the biomass grows, and it recovers after massive extinction events to produce ever more variety and capture more of the energy available to fuel it.
You are making assumptions, but they are assumptions in one direction, while the network is based on a different set of assumptions. If you look at economic growth, it works in a similar manner: the world economy relies on growth, and there are different sources of this growth. Some are running low or reaching limits (resources, ecology etc) while others are accelerating (technology, automation).
So it is a debate, or rather an experiment. The Safe Network experiment is based on observation, analysis and design and we can debate whether that is valid, sound etc. but in the end we will only learn by experiment.
As always with people speaking with certainty about something, I recognise it is a belief you hold strongly but that this doesn’t make it true. IMO there’s much to be said for not being so certain about a particular opinion so I don’t find your certainty convincing. The points you make are valid, but not givens and the counter view is valid IMO.