[vhfpmr (OP)]

As deafness develops, does the threshold of damage rise in step with the threshold of hearing, or does the safe zone between loud enough and too loud shrink?

[Halc]

I would say that technically, the 'safe zone' shrinks.
Hearing aids are not loud enough to do damage, but similar to lepers losing fingers because they don't detect damage being done to them, a sufficiently deaf person might not evade noises of sufficient level to do further damage.

Anyway, there seems to be no evidence that the threshold of damage rises with onset of deafness.