Imagine a 100k of transactions is been included in a single block, then this will greatly affect the decentralization of bitcoin, numerous number of transactions that’s can be batched to one separately because the fee is low and this will mean a bigger block size which in turn results into high cost of individuals running a node as the cost to store data will be expensive and also will push out pools with smaller power (hashrate) out of the network and then the network will be centralized to only the big mining nodes which some of them have started censoring transactions already.
Pools are already as centralized as it is, increment in block size probably decreases their profit margins but it wouldn't mean that they won't be able to run a node. After all, server costs are always going down and increase in block size doesn't mean that they suddenly won't be able to run a node. Most people are also not willing to run nodes anymore, and if you steadily increase the block size, I suspect the impact would be less than expected.
The key issue here is that even with Segwit, we are still facing outrageous fees, and that the network seems to be stagnant after having Segwit. There is also another issue about a hard fork and if the community is willing to adopt it.
Also even if the block size are increased wouldn’t the shittokns like ORDI and STATs continue to spam the network? Decentralization is the major concern whenever the issue of block size increment is discussed, there is no way it wouldn’t be affected.
They will, but that isn't something that you can deal with. If they have the money, then the fee mechanism acts as a regulator for them to incur larger costs with more spam. However, if you can increase the block size to alleviate the on-chain situation while promoting off-chain growth, then I don't see why not?