There is still a plan to activate 2MB blocks, at a later date (which is part of the Segwit2x proposal).
I actually don't fully understand the reasons for why the pro-segwit side doesn't want to increase the block size (even beyond 2MB), except that it's a slippery slope: with Bitcoin, every time you change the block size it requires a hard fork.
Increasing the block size isn't a long-term solution, because there's always going to be some new ceiling. Eventually increasing the block size will become impractical.
As an aside, some coins have a variable block size to deal with this. AFAIK Monero is the only "major" coin which features variable blocks. It's also the only coin that's actually private.
I don't understand why bitcoin is afraid of hardforks. Ethereum hard forks like there is no tomorrow, and so far the number of major block-chain-splits is equal, two. The offical implementation not forking does by no means prevent anybody else from hardforking to begin with, Bitcoin cash demonstrates.
I think ZCash is the only coin that is private in a real sense; Monero is somewhat private, but as I recall, by watching the mempool, it is possible to see the chains being built and to reconstruct the payments. That's all transient data that is not included in the blockchain itself, but for agents interested in tracing future transactions or logging current transactions there's a significant amount of pseudonymous traceability.
This was based on my own assessment of the whitepaper when it first became prominent. The way that transactions were formed was to build on an existing transaction in the mempool and mix the results together with the ring signatures. Looking at the coin now it appears that there's some optional (soon to be mandatory) protocol changes that will mask the output addresses, but I have not looked closer.
The Wikipedia article has two papers that draw similar conclusions about the traceability:
RingCT claims to conceal the amount, and "stealth addresses" claims to obscure output addresses, but I have not verified these claims because I'm reluctant to spend more time verifying a coin that I am skeptical about.
I was honestly pretty skeptical about it for a while too, and only recently came around after finally sitting down and doing some reading on it. Currently Monero is the only coin I'd trust for any sort of transaction requiring privacy.
I think you might be mistaken. Zcash is definitely NOT private for the majority of transactions. You have to opt-in to obfuscated transactions and so few of them are private that the ones that are really stand out.
Monero enforces privacy on all transactions by default. Back in the day you could send non-private transactions but during one of the previous hard-forks they removed that ability.
I actually don't fully understand the reasons for why the pro-segwit side doesn't want to increase the block size (even beyond 2MB), except that it's a slippery slope: with Bitcoin, every time you change the block size it requires a hard fork.
Increasing the block size isn't a long-term solution, because there's always going to be some new ceiling. Eventually increasing the block size will become impractical.
As an aside, some coins have a variable block size to deal with this. AFAIK Monero is the only "major" coin which features variable blocks. It's also the only coin that's actually private.