Otherwise the basic plan seem to be to pull a bait-and-switch, selling people on a purportedly person to person grassroots currency then pulling the rug out from under them by migrating it to business-to-business then to megacorp-to-megacorp...
If the blocksize limit is lifted, and blocks continue to grow without bound, to me the plan seems to be a bait-and-switch, selling people a purportedly decentralized currency that anyone in the world can validate without having to rely on third parties, then pulling the rug out from under them by migrating it to a system where only big businesses able to invest the thousands of dollars
required to purchase high-speed network connections and lots of harddrive space can validate blocks.
For it to be a p2p network, I think we need to do something like look at the median, mode or mean home computer on the median, mode or mean home internet connection and ensure our limits keep it reasonable for folks to run full nodes on such systems without sacrificing their ability to run their accounting software and their word processor and their browser at the same time...
...and a 1MiB blockchain limit does this. That's 55GiB/year, low enough that anyone will be able to afford the hard-drive space to store a full copy of the block chain for years to come. Anyone will be able to also afford an internet connection, nearly anywhere in the world, with the capacity needed to participate as a full, validating node.
Like it or not we can't have every transaction using Bitcoin on the block chain. We need to develop alternate solutions anyway for small-value transactions, and since we're doing that, why not use those solutions for day-to-day spending and keep the blocksize low enough to keep Bitcoin itself truly decentralized?
My biggest fear is these small-value transaction solutions won't be developed, and instead we'll see pressure to just keep raising the blocksize, losing decentralization each time until Bitcoin is just another PayPal.
I can understand how needing greater bandwidth can cut off a minority of miners.. but how can it concentrate it into the hands off just the few? If you look at bandwidth usage statistics aren't a majority of the people that mine bitcoin currently considered high bandwidth already? Therefore this "centralization" simply means into the hands of what already is a majority which should theoretically get even more dispersed the more high bandwidth connections are available right? Or is some extremely powerful bandwidth connection able to eliminate "normal" high bandwidth users?
So your biggest fear is that alternative solutions to the block size limit won't be made? In other words what the other guy mentioned bitcoin clearing houses? How does that help decentralization?