The reason why the two sides cannot get to an agreement is that there is no real solution to the scaling problem.  To get the system to an economically sane state, the price would have to drop by at least 90% to be compatible with the current volume of e-payments; and the total hashrate would have to drop by 90% too, so that a minimum transaction fee of ~0.10 USD/tx (not 0.05 BTC) would be enough to motivate and sustain the remaining miners.  

In fact, since that minimum fee would probably suppress more than 80% of the current traffic, the total hashrate would probably have to drop by 99% or so.  Obviously no one in the community would accept such plan.

As has been pointed out uncountably many times, the fee market will not work. Even before the network gets fully saturated, users will stop using bitcoin because of the unpredictable delays and insane fee-setting mechanism -- not because of the fees being too high.  The fees themselves are unlikely to rise much. At the equilibrium saturation (ay, 80%), even the minimum fee will give expected 1-day confirmation, and a slightly higher fee will give normally confirmation in a couple of hours. 

On the other hand, there will be no fee level that will *guarantee* conformation in 10 minutes, or even in a couple of hours.   The network will be highly vulnerable to huge "traffic jams" resulting from anomalous traffic surges or from malicious spam attacks; so no person or company will want to use bitcoin (or its blockchain) for serious applications.

Limiting the block size to force the appearance of a fee market is the stupidest possible way of raising the transaction fees: it will cripple bitcoin by making is even harder to user and more unreliable than it is now, with little prospects of achieving the intented result.  

From having debated with them here and on bitcointalk, I know that some core devs cannot understand the problem simply because they are incompetent. Some have trouble distinguishing "wish" from "predict", and believe that the fee market and the LN will work because they *want* them to work.  But others know pretty well that holding the 1 MB limit will force bitcoin holders and believers to use off-chain solutions in order to spend their coins; and they expect to profit from that, by providing said off-chain solutions.