Nobody said that propagation delays are the *only* obstacle. We said they are currently the *primary* obstacle, because currently you will run into the trouble at much lower tps.
That is incorrect. We are already seeing centralization due to the enormous costs of running a full node. The number of full nodes in operation is
declining, despite increased awareness of bitcoin. And currently the network propagation time is too small to have any meaningful impact. The trouble spots in scaling bitcoin are elsewhere at this time, I'm afraid.
maaku, how is this related to scalability? You could have 0 transactions going through Bitcoin and still the cost of running a node would be high. The reason for that is high competition in mining brought on by the costs of specialized hardware. I don't see the connection.