Earlier quoted context omitted.
True, but it doesn't make sense to throw out the baby with the bathwater. From what I've seen being argued about proponents of defi (or smart contracts) is they operate on the premise that the centralized authority is the bad actor. While this is true in some cases, it's not all cases, and despite it's flaws there is still a need for centralized authorities to arbitrate.
The issue with centralized authorities that has to be mitigated somehow is that, once they appear, they tend to accummulate more and more power, and inevitably become a bad actor eventually, even if originally they weren't intending to. A decentralized approach to this is to have the hierarchy of authority organized bottom-up rather than top-down. The hierarchy can then be toppled by "pulling the rug" at the bottom-m…
Which is why we have a democracy so that rulers don't have to worry about getting killed in a rebellion and people can choose a new ruler when corruption gets bad enough.
This of course means that corruption tends towards the highest people can tolerate. So if you see corrupt politicians it is because people tolerate it, if they wanted they could vote them out but people as a group don't care enough to actually do the work necessary to do so. However if corruption grew large enough as you fear then people would start caring and things would change rather quickly.