Bitcoin is deflationary, but that is not a problem per se. During periods when interests on savings are greater than inflation, that doesn't stop people from spending their money.
And Bitcoin favors early adapters, but I think that period mostly passed already. Only people with very specialized hardware can mine Bitcoins nowadays, it already moved from CPUs to graphical cards and later to FPGAs, and it's said that it will move to custom silicon in the near future.
"Moreover, it is based on natural resource burning just for the money to 'work'." -> That is comparable to the gold standard (when it was still used), you mine gold, an useful material, but you just put it away in a safe, never to be used for anything.
When all 21 millions BTC are issued the system will run merely on fees, yes. This was anticipated from the beginning. Notice the current reference implementation already uses a transaction fee by default in most cases. You can choose not to pay the fee if you want, I think most miners still accept transactions without a fee. The fee is typically 0.0005 BTC.