You misunderstand, it should not be centralized under any development team. There should be many developer teams with many competing implementations of Bitcoin this is where the decentralization of development should lie.
It is interesting that you say we can not crowd source engineering decisions. If that is the case then it would make sense that different implementations of Bitcoin have their own internal decision making processes, and some like XT would decide on having a "benevolent dictator" so to speak. I believe this is rather common throughout open source projects. The consensus and the choice lies with the miners, the economic majority and the users in terms of the code they choose to run. This is how Bitcoin can remain free and decentralized.
Should? So what? How do you enforce it? We already have several implementations, and where are they?
Development skills are a scarce resource, and having multiple 'competing' implementations is actually wasteful. In a sense, Bitcoin Core is a kind of natural monopoly, because only this way it can attract sufficient expertise, and thus be robust and stable.
Maintaining a fork of Core code is actually much easier than maintaining different implementations, and XT, when it appeared, was OK -- it did implement some client-side BIPs that didn't make it into Core. It only became controversial when it started pushing changes to the protocol.
If you mean many competing versions of Bitcoin
protocol, that's a completely different domain.
Having multiple 'competing' implementations is indeed wasteful. So is sending every transaction to every full node on the network. The point is that decentralization is wasteful and very inefficient. However the cost of decentralization is worth paying because of the benefits it brings.
Bitcoin would become more robust and stable once such competition and decentralization exists within development. Having multiple 'competing' clients would most likely eventually lead to having competing versions of the Bitcoin protocol this might be unavoidable. I do hope that this block size debate will not cause a split but future issues might justify this however. Increasing the supply of Bitcoin for instance in the future might cause a split, I would not support such a change. However for people that really believe in inflationary economics as opposed to the deflationary model of Bitcoin this might make sense for them. One of the beautiful things about Bitcoin at least is that there would be no tyranny of the majority since people can choose what side of the fork they wish to support for themselves.
Quite the contrary, actually. More implementations, as they are diverting resources, mean lower quality of peer-review. This has already been
demonstrated in case of btcd, where it could've forked because of a sublte bug in opcode handling. Jeez, even Core, despite extensive peer-review, has forked in the past because of code bugs!
The danger of centralisation of power and tyrrany of development would be to great of a cost to pay for not diverting resources. Since decentralisation implies the diversion of resources. Having multiple implementations would make the protocol more robust over the long term.
Bitcoin is consensus-critical, so you can't apply the same principles to it as you would to other open-source projects
We can apply some of the same principles to it since Bitcoin is also a open-source project.
As for "having competing versions of the Bitcoin protocol" -- this won't work. How do you enforce network consensus then?
You should not and can not enforce network consensus in the case of a split.
Bitcoin is not about the tyranny of the majority. It's about tyranny of the protocol. Rules have to be enforced for the network to function.
You are advocating tyranny of the protocol, I disagree. Bitcoin is and should be voluntary.
If you think that we should all rely on the internal decision making process of Core. Then we will run into some of the same problems that large corporations and states run into, since if we wanted the Core development to reflect the will of the economic majority or possible another measure of consensus. Then we would need to attempt to construct a type of centralized governance structure on top of Bitcoin in the form of Core development, this in my opinion would be in conflict to the principles of freedom and decentralization that Bitcoin was founded upon.