No. If all miners start mining their own fork (e.g. creating 250 BTC in a block instead of 25 BTC), users' wallets will reject such blocks. Some other miners will pop up to continue mining the blockchain under previously agreed upon rules.

If it happened just like that, all the new money (which really helps keep prices higher) would dry right up.

Assuming the majority of mining power evaluates protocol changes to decide if they're beneficial or not.

Is that assumption true? Or do people just blindly update whenever there's an update?

Miners can't just go and change the protocol. They risk that non-miners won't accept new blocks, so if they are going to enforce different rules, they need to make sure that everyone (not only other miners) will be okay with that.

Of course, some people can upgrade blindly. But if in the middle of transition it turns out that some people are worse off, everyone will rush back to avoid wasting resources on blocks that are not 100% accepted.

Well, you don't regularly see contentious protocol changes. I agree that miners are mostly following the technical leadership, I'm not sure it is 100 years true.