Many exchanges = more competition = better exchanges
I'd prefer many choices rather than just a small number of exchanges handling majority of the cryptocurrency market. I couldn't think of a downside as of now. But yeah, hopefully we get more decentralized exchanges in the future.
In general you are correct. The more competitors join the game - the more profit goes to a consumer by better conditions, new features and so on
We just need to be more careful on choosing exchanges, because not all competitors are willing to offer good services. Ive heard about scam exchanges before and for sure they will not last in this market. Id rather focus on the top exchanges for my own security.