I don't understand this sentiment - the allure of Bitcoin isn't that it is always decentralized, it's that it can be if you want it to. You decide the level of trust you want to have. If you trust almost no one, you run a full Bitcoin client connected to a few trusted nodes. A step up from that, you're running a chain-less client that has to trust wherever it gets it's balances from. Continue up the ladder until you reach whatever Bitcoin will eventually call banks.
Many of us see no reason to go that far up the ladder. Those banks will have regulatory and insurance costs. Cost that will need to be borne by higher fees. If the fees get high enough why even use Bitcoin just use Paypal and optionally hedge your exposure to inflation.
The proposal is an "old world" way of thinking. Green addresses solve the problems indicated by the OP and honestly for most transactions the confirmation delay is a non-issue. There is no need to wait for confirmations on revokable transactions and double spends in meatspace are essentially impossible for a well designed merchant system.
So
revokable transactions & low value physical world transactions - confirmations a non-issue.
longer time frame transactions - confirmation delay a non-issue.
high value realtime transactions - use a green addreess.
Why do I need a bank (w/ never ending and always growing bank fees) again?
Because bitcoins work well if what you want to do is something like bank transactions. But waiting 10 minutes is just too much if you want it to work as if it was cash. Credit cards and cash are way better than bitcoins because the money goes from one hand to another instantly.
The lay man won't accept waiting for 10 minutes, not even 1 minute to be able to pay -in a physical shop- in bitcoins when you can just pay in USD cash or USD credit cards. Until you solve that problem, bitcoins just won't get mainstream.
And if you don't accept that fact, well then you'll have to deal with the fact that bitcoins will not become mainstream.
So if you want bitcoins to become mainstream, you want to be able to use bitcoin cash. And for that you need a trusted third party that will guarantee to the seller that the transaction will take place. And the name of such a thing is a bank by definition. So you need banks.
