As the answer by @MeshCollider states, those BTC are lost forever, altough there is one more thing I believe is worth of consideration.

Cryptanalysis never get worse, it always get better with time. One day, the current algorithms used to secure bitcoin could get old and weak enough. It will probably be, as it typically is with cryptanalysis, a gradual process. First there will be some unpractical, but theoretically possible attacks, then some practical, if not too hard or improbable, then with a good equipment and enough money it will be possible to spend those coins and finally everyone will be able to do that with their PC. This whole process will probably take years of slowly advancing cryptanalysis.

The bitcoin community will probably adapt a new algorithms which will require a new generation of addresses when the current algorights will be close to be broken, but the old coins will remain insecure as long as they are on old addresses. That will probably require users to transfer their coins to the new-generation addresses to secure their BTC. If that will be the case, the lost BTC will remain on the old addresses, where they will be vulnerable to retrieval. It will result with a new enterprise of retrieving those coins, which will therefore return into circulation.

Note that it this answer is highly speculative. It relies on two assumptions:

1. That the algorithms will be broken one day, which is a highly reasonable assumption, as it has been the case with many algorithms before.
2. That the problem will be solved by the community in a way I described, which is reasonable in my eyes, as I haven't seen any better proposal to date, but noone can be sure if that will be the case.

Bottom line: lost bitcoins might be like gold sunken in the oceans: it may be unretrievable now, but one day it might return to circulation.

Yes, if he didn't have the private keys backed up anywhere else then indeed they are lost forever. You are correct that more and more bitcoin is lost over time because of things like this.