Then I would debate that the statement, "allowing it to scale to handle tens of thousands of transactions per second without impacting fault tolerance or decentralization", is u true.
The actual effect on fault tolerance and decentralization has to be put into context that currently over 50% of Bitcoin's hashpower comes from only 4 pools. As BlockReduce scales the node requirements to have a node which does partial state validation would be much less then a if Bitcoin scaled in its current state.
That would mean that although there may be fewer people validating full state, there will be more people, and fewer pools validating partial state. I would argue that having partially validating mining nodes is advantageous over having a deminimis number of pools. Having smaller economic entities decide on the fate of the protocol rather than a few large pools would be positive for the ecosystem.
Is to REALLY scale out the network is = more
partially validating nodes, but fewer fully validating nodes?
That goes the opposite path of what you said below. Or might I have misunderstood?
https://bitcointalk.org/index.php?topic=5060909.msg53240986#msg53240986Yes, scaling the network is adding more network participants, this is accomplished through scaling.
More participants partially validating, which won't be part of the whole network, and less participants fully validating is centralizing, making the network smaller. It is anti-scaling.
I think you should more holistically consider the meaning of centralization. If I can't go to 7-11 and buy a coke with Bitcoin it is not fully decentralized. If I need to have 3rd parties involved in a transaction it is not fully decentralized. If I need to use centralized exchanges to trade with good liquidity it is not fully decentralized. If it costs $200 to make a transaction it is pricing out network participants and small transactions which is not fully decentralized.
The more people that use Bitcoin, not just the number of people running nodes, is critical in answering the question of is it is decentralized. Additionally, to have the largest network with the most particpants (most decentralized...?), I would argue that Bitcoin needs to scale on-chain.
Growing node requirements/costs would only make node count go down, not up. Block Reduce might increase transaction throughput, but it's centralizing.
If there are benefits such as a greater number of users, and increased utility at a lower cost, the marginal degree of centralization (fewer fully validating nodes) may very well be worth it. However, I would contend that with larger user base even if the cost of running a fully validating node increases, the absolute number of full nodes would likely go up not down even if the relative number shrinks.