It is sacrificing security and is becoming more centralized.
Exchanges are becoming top holders of ETH for the staking, now you have a concentrated point of failure for attacks.
It also opens up the possibility of being controlled directly by the government.
Great point about exchanges becoming top holders of ETH. Of course, they need to stake it, but as we've seen in the case of Steem, they have no problems staking custodian funds. And Ethereum unstaking will likely be much quicker than 13 weeks. Plus, they have these options for customers to stake their ETH for some staking rewards. I'm sure even in this case they keep their cut, but what they have are control and influence and that's what they want even more.
@yibbiy said: "It also opens up the possibility of being controlled directly by the government."
I haven't seen many people talking about this exact thing! There are floods of regulations coming and Etherium just made it easier.
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I talked about easing the possibility of control in my post. I didn't mention governments, but Wall Street is used to regulations too and would probably welcome and even encourage them, once/if they'll control Ethereum.
Crypto was supposed to be decentralized, and it all turned out to be centralized overtime, for efficiency.
Centralization and PoS may evolve to be very similar to the corporations and banks we have today in many aspects.
When much has changed, more reverted back to the same.
Quite true. In a centralized system, there's little difference between stakers and shareholders.