ever heard of sidechains?
No, this is literally the first time anyone has mentioned them ever. 
Ever heard of things that actually exist and are proven to work? Because sidechains aren't ready yet. Still in development. Not functional. Untested. How many more times are people going to keep saying the same damn thing like it's some sort of fantastic solution no one has considered? Yes, sidechains would be great if they were an actual thing. But they aren't.
Therefore
Keep blocks small?
Keeping blocks small is not an option. We've never attempted to run the network with full blocks before and clearly you don't understand the implications of doing that. At present, if you pay a fee, your transaction is pretty much guaranteed to be included in the next block. If you don't include a fee, you may be left waiting. This is how the network has operated since inception. But if blocks are full, even if you pay an average fee, there may be insufficient space to be included, so you're left to guess what fee needs to be paid at any given time. This amount will not only vary depending on traffic, but will also be difficult (if not impossible) to accurately forecast. Every transaction would be a guessing game as to whether it is confirmed in the next block or you have to wait. If you guess incorrectly, keep waiting. This level of uncertainty and risk is frankly unacceptable and would undoubtedly impact adoption in a negative way. Not to mention the forums here would be an endless shitstorm of people whining about delays, saying "Bitcoin is slow and broken". Attempting to run the network at full capacity is not a desirable outcome for anyone. Keeping a 1MB blocksize is not viable because no one wants to play guessing games when it comes to time and money.