Hi OP. Forgive me if I skip everyone, and answer you directly.
From what I understand, a larger block size would mean more transactions (or data in general) can be included in each block effectively increasing the number of transactions the network can handle in a finite time frame (at least 1 block long). Consequently, the size of the blockchain will increase at a greater rate since more data is being added everytime a block is accepted. Eventually, this would mean the blockchain would be too large to store so only dedicated companies will be able to have full nodes,
Storage is not a big problem. It's bandwidth that's the big problem. There are fewer and fewer people running nodes because syncing the blockchain takes frustratingly very long.
resulting in the centralization of mining.
No. Resulting in the centralization of the
network. Larger blocks improve functionality, but it scales the network in.
Wouldn't that happen eventually anyway? Sure it'll take longer but unless the chain is pruned how will people be able to store it?
I believe you don't understand how it works. Even with pruning, you have to do the initial blockchain download, and validate it. All 200GB of it.
The only people running full nodes now are enthusiasts who like verifying everything themselves (though it's getting harder since the blockchain is already pretty big), pool operators, and mining farms or services like NiceHash/Blockchain.com
But how does taking away anyone's ability to run a node good?
This is not a post in support of a change in block size or for sidechains, I'm not qualified to take a side in that debate at all lol. What are the consequences of a block size increase and more specifically how it would be harmful for bitcoin's decentralization?
Bigger blocks are inherently centralizing. What is there else to say?
Real scaling is to increase the network's functionality without giving up decentralization.