What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?
Of course, when fees are high, users always look for alternatives that are considered more flexible as you mentioned above in trading Bitcoin through centralized exchanges.
The issue of fee has always been a hot discussion, I myself respond to it usually and this is also I think there is a positive value which on the other hand is also a driver for regulators to pay more serious attention in finding and setting reasonable costs so that the best solution will be born in an effort to improve network scalability and efficiency.