Earlier quoted context omitted.
It would need larger blocks, but it was the general understanding within the community before the fork that with Moore's Law, hard disk capacity would increase and price would go down in the future, so it really isn't a big deal, and not enough to cause "centralization of nodes" like some people argue. Also, my understanding is that Lightning Network is semi-custodial, so it's probably more similar to banks than cred…
What do you mean by “semi-custodial”? You’re not giving anyone the keys to your address. It’s nothing like a bank.
The problem with the LN is that it's like a gift card (I said credit cards before but gift cards is a better analogy). I need to send $X on-chain to establish my "store credit" so that we can transact off-chain for future transactions, before eventually resolving on-chain at some point in the future.
Imagine network address translation but stupider by orders of magnitude :P