For the most part I've already confirmed this logic in the original post.
This is very much a back-burner idea.

No one in their right mind is going to keep transacting at those fees

They definitely will if Bitcoin gets actual adoption from banks, governments, and corporations.
No one's going to care about a $1000 fee if millions are being transferred around.

The real question is if multisig is actually better than just using an exchange that's already been around a while and has a reputation. If so then exchanges themselves should just be multisig (which they already are when concerning cold storage). I think it's far more likely that many just abandon BTC completely for the smaller cheaper networks.

At the same time a Bitcoin debit card works in largely the same way (except centralized).
Using the debit card spends USD and that amount is deducted from the BTC paired to it.