Sure, it may turn into an arms race, although one of the other points of adblock is also that it doesn't download the advert - so it's extremely easy to detect an adblock user.

I think if adblock usage increases (I don't think it will), we'd move to a 2 tier internet - a degraded slimmed down internet for adblock users, and the full internet for everyone else. Which I think would be fair and just.

This will not work. A good adblocker will load the ads, but it will not display them. This is basically what my recognition center did before I switched to adblock (and had an improved internet experience due to (massively) reduced load times and no annoying, blinking things). The important thing about the last sentence: You cannot assume I actually react to something in the ad, and the ads are loaded, thus, there is no way for the server to recognize a good adblocker.