The government has more than one control over the current money supply, fractional reserve lending allows the money supply to grow and shrink as demand requires while the fed attempts to maintain an overall small inflation rate to avoid the ill effects of deflation.

> Who cares if prices stay stable or not?

Everyone who understand economics even a little bit.

> The value represented by whatever price is attached to those things won't change

People aren't paid in value and they don't spend value, they're paid in currency and they spend currency and they all care that prices are stable because their paychecks aren't going to suddenly change.

If it is not useful as a value store except to speculators, then it still has plenty of utility as a value transfer mechanism or a universal FOREX.

No one said it didn't have value, merely that it's not a good currency because it won't have a stable value if used as a currency.