Both are needed, "everything in moderation" is the key.
In a truly decentrailzed world, the blockchain infrastructure should be a "non-excludable", "non rivalrous" public good.
Transaction fees act as an exclusion device - if you can't pay them, you are excluded from the infrastructure. Imagine someone gifts you a valuable NFT on an address you control: without ETH (or whatever the coin of the respective blockchain is) you cannot move it, you cannot transfer that asset. Or it is the power to transfer that asset that is the principal marker of "owenrship" for digital assets.
The tendency of people to flock around one blockchain combined with limited scalability (which is a defining characteristic of the blockchain design) also make the "pyramidal" spirit of the Ethereum eco-system "rivalrous" - more use from some make it less usable for the rest.
RE: Ethereum: the Goldman Sachs of blockchains