This assumes a perpetual loss of keys every year which I’m not sure is valid.

It happens all the time now since it’s relatively new to almost everybody but as time goes on and bitcoin becomes more valuable and professional services and best practices mature we should expect a diminishing rate. In your article’s terms lambda would trend towards 0.

There’s a selective pressure in the community: as time goes on Bitcoin should flow into hands of people who can responsibly hold long term since the ones who can’t will become economically less relevant. Not a judgment on them by the way: I’ve lost coins too.