Are you using deflationary in the traditional finance sense or in terms of supply as it's used in the crypto space? If the former, am I understanding correctly

Are you using deflationary in the traditional finance sense or in terms of supply as it's used in the crypto space? If the former, am I understanding correctly that you're upset ETH is an appreciating asset? If the latter then you're incorrect. Right now it's inflationary and after the merge to PoS it'll still be inflationary but less so. EIP 1559 has a gas burning mechanism that can make ETH deflationary but it depends on usage. Even if that is the case, it will only be short term until an equilibrium with the price is met (as ETH price increases, less gas will be needed/burnt, reducing the effect on inflation).