> The presidential election is decided in the swing states
That's both true and misleading. The decisive factor in Presidential elections is base turnout. Obviously, the states where the outcome is least certain are most decisive, but this doesn't make centrism a particularly winning general election strategy for either party, which is why the Republicans haven't nominated a centrist Republican in decades, and the Democrats have consistently underperformed where they naturally should perform from party ID (including taking into account he state-by-state distribution), despite nominating candidates from the center-right neoliberal wing in every Presidential election since 1992.
> and with the current system the centrist Democrats do have a point
No, they don't. Their point is literally “We should keep doing the thing that we've been doing and expect that doing so will result in something other than the results it keeps producing.”
> America needs two periods with Democrats: the first one won with/by centrists, who then fix up the electoral system issues (gerrymandering, FPTP, voter suppression, campaign financing)
Why would centrists Democrats—who use all those things to argue for why progressives must vote for them instead of actual progressive candidates (and despite the fact that that strategy manifestly doesn't work)—want to fix any of those things and thereby terminate their own argument for dominance within the party?
You might as well expect Republicans to fix them; they have just as much (that is, negative) incentive to do so.