But if the purchasing power of the currency has increased then the value has only dropped nominally. The money received from the sale of the asset will buy more than previously.
the real value of debt increases
That is true. During a secular deflation, one would only go into debt if the project will pay off more than the rate of deflation.
and commerce slows to a crawl as everyone knows that waiting to buy something means they'll get it for less.
That's an unproven fallacy. Perhaps you should tell chip-makers and computer manufacturers that the secret to increasing sales is to raise the price of their products rather than lowering them.
Businesses produce less, wages fall, demand falls and prices fall further. It becomes a deflationary spiral to complete collapse.
See above: fallacy
Even Hayek thought deflation was a Very Bad Thing.
Hayek was speaking of the deflation I mentioned in my comment: the disastrous result of a government-sponsored central bank's yanking the rug out from under the boom it created in the first place by lowering interest rates too high.
But deflation is not always bad. If it results from a stable currency and productivity improvements, it should be welcomed -- not feared.
Reduced price of one commodity or another due to competition or efficiencies in production is not deflation.
During a secular deflation, one would only go into debt if the project will pay off more than the rate of deflation.
The problem is existing long term debt, such as mortgages and bonds.
See above: fallacy
We don't really know, since deflation on that scale has never happened, but the Great Depression came pretty close to meeting that description.