What do you think would Ethereum sustain this pressure and retain its leading spot?
I thought Ethereum won't live this much, but it is still hanging on. Who knows, maybe it will retain the no. 1 spot for smart contract platforms in the next couple of years.
How would the Proof of Stake, if implemented in time, work for Ethereum?
It might work, but much depends how they do it. I don't think they have a clear idea how PoS would work without a centralization.
Does Ethereum decentralization give it an edge over other centralized smart contract platforms?
Ethereum is not overly decentralized, even now with PoW. PoS would make things worse in this respect.