I see expanding the validator set as the middle ground between the status quo and some heavy-handed set of restrictions and disincentives. It is definitely not a magic pill to fix decentralization, just a potential baby step.
Adding new validators to the active set has no guarantee of causing any delegator to the top 7 validators to redelegate, or driving new delegations to those new validators instead of the top 7.
But while there’s no guarantee, newer validators would at least have a chance to be present, let the community know who they are, what they stand for, what they’re working on, and maybe interest at least a small number of delegates – and here’s the important part – without having to ask delegates to redelegate to an inactive validator and miss out on their staking benefits (potentially indefinitely if the validator never makes it into the active set).
Under the status quo, there is practically zero chance that any validator other than a person or group with pre-existing wealth would ever attract 700,000 USD worth of Atom from the multiple thousands of delegates that would likely require, who are all willing to forego their staking benefits.
I don’t think a good validator who’s in the top 20 and does great work and is a great presence in the community should be penalized with disincentives. I see more validator spots as a baby step than a magic pill that just fixes decentralization.