There was an interesting research paper (which I can't find) that claimed that high frequency trading is largely driven by the artifically high limit on bid/ask spreads. The claim is that if trading was allowed in much smaller fractions of a dollar traders would compete by underbidding/overoffering instead of competing to be first in the trading queue.
That seems plausible to me-- set an arbitrary constraint ("bids must be in multiples of a tenth of a penny" -- or whatever it is these days) and you often get unintended consequences.
I still plan on writing up why I disagree with the idea that a larger block size will lead to centralization, but I'm working on some higher priority things first. I really don't understand why you would think that our current, arbitrary 1MB limit is the Best Size For All Time. I think that arbitrary constraint will have bad unintended consequences.