Total newbie question... doesn't a high ETH price stifle the underlying tokenized economy which in turn acts as a mechanism to drive ETH prices lower?

I have heard ETH being compared to oil. If oil goes up too high, those, who can, will cut back its use. If ETH goes to some stupid high prices, wouldn't people cut back on its usages and help prices go lower. Wouldn't higher prices also encourage the production of more ETH... the old the solution to high prices is high prices. Please explain to me where the flaw is in my reasoning.