There are two elements to your argument to date: First, that there is an unprecedented decline in fertility going on; second, that the decline in world population in 50 years or so that might result from this decline is a bad thing. Let's leave a discussion of consequences to Round 3, and focus on your "something very big is going on that has never happened before" element.
For what we call the developed world, it has all happened before, even down to the rhetoric. In the 1920s and 1930s, the Net Reproduction Rate (a measure that combines both fertility and mortality to provide an indicator of long-term population growth) fell to well below unity in much of the developed world. In Britain, for example, the NRR in 1936 was 0.74, a level that would imply a population decline of 26 percent each generation and was below any level reached in the 1970s or 1980s. The rhetoric of the population-decline alarmists then was strikingly similar to yours. For example, Enid Charles, in The Twilight of Parenthood, wrote in 1934 that "in place of the Malthusian menace of over-population there is now a real danger of under-population." Charles blamed the low fertility of the time on what she called the "Acquisitive Society," in which children were "regarded as a form of capital expenditure which brings the parent no return commensurate with its investment value to society as a whole." "Statistics clearly show that the choice between a Ford and a baby is usually made in favour of the Ford." It all sounds very like Wattenberg in the 1990s, "Young men and women conceiving children ... are thinking about a good life for themselves, in quite new, modern, circumstances."
So "been there, done that" over 60 years ago. And what happened then? Why, the baby boom happened, with sharply rising fertility rates and rapid increases in population size. These rapid increases in population were quite unforeseen: In the early 1930s, forecasts of the U.S. population by Thompson and Whelpton, based on contemporary trends of birth and death rates, gave a maximum population in 1980 of 155 million. The actual population in 1980 was about 230 million.
What is new is the decline in fertility in the developing world. Population growth has been low before (for example, up to the 1930s, population growth in China was essentially zero), but that was because of high mortality, not low fertility. What should we expect next? I agree with you that there is nothing magical about replacement fertility, no reason why populations should settle on just that level of fertility that implies a stationary population. In the developed world, fertility fell through replacement level in the 1920s, rose through replacement level in the 1940s, and fell through replacement level in the 1970s, but the reasons for these changes, and especially for their timing, remain obscure.
This brings us to the various U.N. population projections. You attack the Medium Variant as being wacky--"[g]arbage in, garbage out." In a particular example, you cite Thailand, with a current TFR of 1.74 that the MV takes back up to 2.1. Why? For a process we don't adequately understand, the best basis we have for forecasting the future is looking at similarities with what happened in the past. On this basis, drawing parallels with the developed world 50 years earlier, we should expect Thailand's TFR to rise by 2050 not to 2.1 but to the 3.8 or so reached by the United States at the height of the baby boom.
Do I really think this will happen? No, though I believe some increase is more likely than a continued decline, and history is on my side. I have no doubt that if the one-child policy in China or community constraints on fertility in Indonesia were officially relaxed, fertility would rise substantially. The fact that the United Nations is revising its fertility forecasts downward reflects the fact that fertility in a number of key countries such as India and Bangladesh has fallen faster than expected. Am I surprised by that? No, history shows that these demographic processes usually change faster than forecasters expect. Mortality rates have also fallen further and faster than anyone would have predicted 30 years ago. Indeed, I tend to be a contrarian when it comes to fertility forecasts: Once a trend is well enough established for the United Nations to build it into their projections, it is time for the trend to reverse.
So history suggests that the U.N. Low Variant will not happen, and history, though far from perfect, is the only guide we have. But for Round 3 of our discussion, let's assume that the LV does take place. Do we prefer a world whose population peaks at 7.7 billion and then starts to decline, or one whose population reaches 9.4 billion and stabilizes? Do we prefer the open spaces, less crowding, protection of biodiversity, less global warming, perhaps even some reduction in world poverty that we might get with the LV to the MV alternatives? I personally like the LV prospect, even though I don't think it will happen.
Looking forward to your views on the pluses and minuses.
P.S. As you stated it, you were wrong about Japan. If fertility stays at its current level and there are no major increases in emigration or mortality, the population of Japan will drop to 96 million in the middle of the next century. There is no room for equivocation with this: It is exactly the scenario that the U.N. LV adopts. Perhaps Dr. Ogawa's figure of 60 million is based on a continuation not of current fertility rates but of current declining trends in fertility. Even this is hard to accept: If there were no further births from 2000 onward (zero fertility) the population of Japan would still be over 50 million (all over age 50) in 2050.