Exactly.

To be clear, that vector is an arbitrarily low block size limit exacerbated by the very poor way wallets handle default fees.

If wallets responded gracefully to this situation two things would happen :

1. Once the "attack" started, wallets would start raising the suggested fee for users wishing to make transactions.

2. As the required fee starts immediate floating up, the "attacker" quickly has to raise his fees or have his transactions denied. This would make such an attack much more expensive, much more quickly

Since wallets don't do this by default, and since users have no information with which to decide what fee to pay, almost everybody pays the default fee. Pricing information never makes it from the miners to the users.

Hopefully this helps explain just how important it is to rapidly get people off of wallets that set a fixed default fee and onto wallets that dynamically calculate a fee based on network conditions and user requirement. If everybody was already using such a wallet, the current attack would be much more expensive, and valid transactions would pretty much all be going through.