> There's no inherent reason we want there to be incentives to spend, unless you're some central planner trying to keep the populace invested in society.

You're confusing spending and consumption. Bitcoin holdings don't do anything. They're a nominal amount on a public ledger, and if bitcoins also serve as the medium of exchange this would be subject to the paradox of thrift.

Instead, a healthy economy encourages people to invest. If I have money (or bitcoins) I don't need for immediate purposes, I shouldn't put it under the mattress (or on the blockchain). I should instead loan it out as debt or equity to someone else who wants to expand production in some way, producing a (probable) real return. That's how we become a wealthier society.

A deflating bitcoin is not well-suited for these investments, since a rational holder of bitcoin would probably prefer to continue to hold bitcoin (not doing anything) rather than take an investment with an interest rate less than the expected appreciation on bitcoin. At the same time, bitcoin's volatility is also bad for secondary finance because it becomes difficult to properly value future payments.

Hoarding currency should never be a viable investment strategy. That it is so for bitcoin is evidence for the speculative bubble hypothesis.