If Bitcoin become becomes dependent on SCs that manage risk for people to protect them from their own mistakes, then we are back into FRN land, where we are all protected and coddled for the minor fee of being slowly boiled alive in the FEDs inflationary pot.
Is Coinbase, Circle, Paypal etc on Bitcoin's chain any different?
And side chains don't have to be centralized systems. His point is that BTC discipline can enforce the right choices of technology thus protecting the masses from their incorrect choices (in altcoins and also wallet technology, etc). Right now the only way to innovate is altcoins which most BTC doesn't vote on.
Everything consistently flies over your head.