You're equating mild, consistent inflation with hyper-inflation. That's not valid. Economies are non-linear dynamical systems that experience phase changes when they pass certain manifolds. Thus the phrases "mild inflation" and "hyper-inflation" aren't just quantitative but also qualitative.
If money becomes noticeably less valuable over time it becomes less attractive to hold money at all - and instead scarce assets like a house, land, or gold, etc would be far more desirable. Suddenly everyone is happy to lend you money but no one wants to hold it. Prices soar.
It's true that BTC would be hard to keep as a currency because there is a tendency toward hoarding when something is rising in value. That doesn't prove inflation is desirable though.