FreeTrade, competing currencies also means if a parameter of your coin is too messed up (e.g. Bitcoin's debasement will decline asymptotically to 0[1]), users could leave for another coin. And there is a research paper that predicts declining debasement is one factor that might cause miners to leave Dogecoin[2].
Rpietila has shown that 5400% annual Debasement (1.1% per DAY) is working to distribute the coin via the normal expected power law distribution of money[3].
Decentralized debasement is the way we efficiently distribute crypto-currency.
Distribution is very important, because Metcalf's Law tells us that usage scales as the square of the number of users. Peter R had even shown that the Bitcoin price is scaling by Metcalf's Law. This is observed fact not just theory.
Dogecoin showed that more liberal distribution works (the community was working very hard to donate and get coins into as many hands as possible). Note there is a research paper that predicts Dogecoin's death due to declining rate of debasement[2].
I agree that distribution is of key importance. One method of debasement of aggregate cryptocurrency, is to create new one with an innovative distribution, as you pointed out happened with Dogecoin. Yet you still speak of a 'dominant cryptocurrency' - I feel this is the source of our different understanding, you think the world will become fixated on a single cryptocurrency. I think the current power-law distribution of crypto will be up-ended.