Why not take advantage of other coins to make money?
Because you have to sell your BTCs, to get them. And if you mine ALTs, then you are probably going to sell them to other users, and get some BTCs instead. And because a lot of altcoins are started from scratch, then, at the beginning, their supply is quite low, so the first miners have a huge incentive to sell everything they mine, because it is very likely, that the price of their ALTs will be lower in the future, as more coins will be mined.
You can try experimental features on new coins before they're rolled out into the main Bitcoin blockchain.
If that would be the end goal, then altcoins wouldn't create any new coins from scratch. Instead, they would accept coins from existing chains, and by validating a signature, will grant each user exactly the same amount, to experiment with.
Also, altcoins struggle with "rolling out into the main Bitcoin blockchain", so their features stay on ALT-only, and are often not ported into BTC.
I get that 99% of altcoins are centralized. But that doesn't mean you should avoid them.
If some altcoin is centralized, then you can have 1:1 peg with that, just by creating 1-of-2 multisig, where one key belongs to some centralized entity, and another key is owned by the user. And then, the creator can use its own key, to execute any kind of contract, on top of existing BTC network. Also, in that case, it would be auditable, because you would know, how many coins were moved by users, and how many of them were sweeped by the altcoin creator.
They think BTC will solve all of the world's problems.
This is not always the case. I don't think that BTC will rule the world forever. But I think, that we have too many coins, and too many separate monetary bases. And that causes a lot of problems, because you are forced to trade between those coins, to use them in any meaningful way.
I have nothing against separate chains. You can always create a new chain, with a new history, and call it an altcoin. But why that history should use completely new coins, instead of wrapping existing ones? If you sign existing coins instead, then at least you can move your transactions to the original chain, in the future. Or batch them, and move a batched version.
If BTC was the only cryptocurrency in the world, it would've been "overloaded" already.
No, because:
1. If you have the same coins, but separate chains, then your usage of a coin on an alternative chain, is not affecting the main chain.
2. By having an alternative history, you can batch it, and push a batched version into the main chain. Which also allows removing unnecessary data, and that kind of feature is not possible, if there is no "upper layer".
3. You don't have to push all your data to the main chain. In case of "cloud storage use cases", all you need, is just saying: "here is my signature, you can download my data from this alternative chain, and watch my coin movements on the main chain". Then, adding any data to the coin, costs you zero additional mainchain bytes, and it is all about tweaking your signature, to commit to that data.
4. If everyone agrees, then there is no need to execute any complex contract on-chain, and you can stick with just public keys and signatures. Scripts should be used only, where there is some kind of disagreement, some party goes offline, and so on.
The more there are, the greater the network effect will be.
Only as long, as coins are converted back into BTCs. But if more and more coins will stay in other networks, then BTC will get weaker, because of that.