Don't worry, theymos has already guided on how on bringing stability and decentralization together:
A decentralized system cannot know anything about prices, so some centralized entity needs to provide SSCN's price to the system as an input. This is an unavoidable point of centralization. But everything else, such as determining x and y above and conducting the auctions, could be done automatically.
This is pretty big, if a decentralized system relies on another centralized system, its own decentralization isn't that valuable. In this scenario this price input feed can be taken down or taken over by malicious party to disrupt the stablecoin. And as practice shows, if attack is possible and practical, it will be executed sooner or later - altcoins getting 51% attacked is a good example. I don't see any point in these hybrid centralized/decentralized systems, they have the biggest flaws of both without the main benefits.