This matter has not been settled at all. Core has made its position rather clear, it is diverting from the original vision of Satoshi. If Core got its way they would block the stream of transactions in favor of off chain solutions. There is presently massive opposition to this move by Core and I suspect that we will see an industry or user led fork rectifying this situation soon.
This is a test of the governance mechanism within Bitcoin. Core should not decide on the future of Bitcoin for all of us. Bitcoin should not rely on a centralized authority in the form of Core to make decisions for us, the market or the economic majority should rule Bitcoin instead, this is best reflected through having multiple alternative implementations to choose from. Since an election with only one choice would be the equivalent to totalitarianism after all. Fortunately we do now have three alternative implementations which will increase the blocksize. BitcoinXT, Btcd and Bitcoin Unlimited.
There is no governance mechanism, everyone is free to start their own implementations like BitcoinXT and then turn it into the official Bitcoin with enough support, but people don't care about it and that's why it's got no nodes running, people is free run nodes for that or not.
You are arguing a straw man in regards to BitcoinXT, most people in the developed world will still be able to run full nodes in their homes under the schedule outlined in BIP101. Furthermore in regards to the vision of Satoshi, he was a greater big blocks proponent compared to most of us.
Im from the developed world and running a node is a pain in the ass already. Luckily the new version will make it boot faster. In any case, the number of nodes now is already low enough, you don't want to worsen it. More nodes run by different people = more decentralized Bitcoin, I don't need to read a million Satoshi quotes to realize this fact.
Bitcoin users might get increasingly tyrannical about limiting the size of the chain so it's easy for lots of users and small devices.
The full quote sounds like he is saying the opposite
Piling every proof-of-work quorum system in the world into one dataset doesn't scale. Bitcoin and BitDNS can be used separately. Users shouldn't have to download all of both to use one or the other. BitDNS users may not want to download everything the next several unrelated networks decide to pile in either.
The networks need to have separate fates. BitDNS users might be completely liberal about adding any large data features since relatively few domain registrars are needed, while Bitcoin users might get increasingly tyrannical about limiting the size of the chain so it's easy for lots of users and small devices.
https://bitcointalk.org/index.php?topic=1790.msg28917#msg28917He is basically saying that putting everything into the blockchain doesn't scale.. so we need LN. You dont need to be very smart to know that without LN and by raising block size only we will never scale to global levels doing it all on the blockchain, not without node farms which is a no-no.