You've completely failed to mention the difficulty retarget mechanism in your analysis. If the block reward drops, miners will quit until the difficulty is low enough that the remaining miners will break even. This will happen regardless of what the new reward per block is, the only thing that changes is the new difficulty/hashrate. (There is some subtlety in that the retarget mechanism takes time to kick in, but if the drop is gradual that's not much of a problem.)

With low hashrate, the network is less secure. This is why we need to come up with ways to make sure transaction fees are sufficient to fund an acceptable level of mining.

But the drop in reward will not magically cause the price to go up. The price is determined by the market.

You've completely failed to mention the difficulty retarget mechanism in your analysis. If the block reward drops, miners will quit until the difficulty is low enough that the remaining miners will break even. This will happen regardless of what the new reward per block is, the only thing that changes is the new difficulty/hashrate. (There is some subtlety in that the retarget mechanism takes time to kick in, but if the drop is gradual that's not much of a problem.)

With low hashrate, the network is less secure. This is why we need to come up with ways to make sure transaction fees are sufficient to fund an acceptable level of mining. (A limit on the data size of blocks is a possible such way, but not a very effective one IMO.)

But the drop in reward will not magically cause the price to go up. The price is determined by the market.