Indeed. The centralization that comes from off-the-chain transactions is exactly the kind of centralization that our current world financial structure is based on. It will, for example, allow widespread use of fractional reserve banking, which is not possible with Bitcoin right now. Whatever happens, we must strive to keep most transactions in the blockchain (most, not necessarily all), otherwise the whole idea behind Bitcoin is more or less doomed.
Off-the-chain transactions are not necessarily centralized, although centralized solutions are definitely the most simple type, and will the first type to be available.
There are decentralized "off-the-chain" transaction systems. As mentioned before, it is possible with alternative block chains. Another decentralized off-the-chain transaction system is the one I proposed in this thread:
https://bitcointalk.org/index.php?topic=94674.0I like it because it is mostly off-blockchain, and, unlike most Ripple systems, it does not allow fractional banking and requires only a minimum amount of trust (less trust than needed e.g. to trade goods or fiat currency online with Bitcoin). OTOH it is "unproven technology" and it will take some time to develop. I'll work on it as fast as I can in my spare time, so that I can demonstrate a prototype ASAP. I hope you see the importance of such systems.