Bitcoin will eventually be capped at 21,000,000 Bitcoins, but what happens to all the wallets that are lost? I'm sure thousands of BTC are already as good as destroyed. Even if there weren't millions of USD being printed consistently, they would still print not only new money to replace the old, but also to account for destroyed bills. Would replenishing the supply of lost currency be possible in Bitcoin?
Bitcoins can be divided up infinitely. So if there was just one bitcoin left (the rest are lost) then there can still be a viable economy with fractions of bitoins.
Lost wallets are only a problem for the people who lost them, not for bitcoin. It would of course limit supply and push the the cost of bitcoins versus other currencies.