I don’t think this proposal would have the effect of flattening the voting power distribution. In fact, it might have the opposite effect, and drive further consolidation of stake to a smaller number of large, well capitalized entities.
Increasing slashing penalties for larger validators favors sophisticated and will capitalized entities who can afford to build infrastructures that are very unlikely to fault. Smaller validators are less able to invest in high quality infrastructure and technical operations, and are viewed as higher risk operations. A simple example is the use of HSM based key management, which even in a simple configuration reduces the risk of a double sign by a considerable degree. Many small operators are not able to afford (or choose not) to pay the cost of the physical infrastructure required, and instead use local software signing with plain text keys on disk. Because the risk of a slashing events can me mitigated by the larger operators, even with a higher cost of a fault their relative risk of loss may be lower than a smaller and less sophisticated operator. It is rational to select a 1% risk of a 10% loss over a 3% risk of a 5% loss (numbers for illustration only).
The need to introduce an anti sybil measure further disadvantages small operators. For many reasons it is difficult, perhaps impossible, to reason about the risk of correlated slashing faults between validators. Small operators are more likely to have similar infrastructure, deployed in similar configurations, with identical software stacks. Many small operators do not use hardware based key management, leaving them all vulnerable to similar risks, which will correlate across diverse cloud infrastructures. While small operators can make claims about their infrastructures and operational skills, they are less able to invest in things like 3rd party audits to verify claims. If a delegator can not confidently assess the risk of correlated faults causing larger slashing events, they will assign higher risk to smaller operators.
Finally, large operators will be better able to insure against slashing losses. As markets mature, sophisticated and well funded operators are likely to be able to acquire third party insurance against slashing, negating the increased slashing penalties. The cost structures inherent in offering financial products of this type advantage larger operators, despite larger slashing penalties. It will be more difficult for smaller operators to qualify for and afford such coverage, leaving them less able to compete. Well capitalized entities, such as centralized exchanges can self insure and provide full guarantees against loss. Very few operators other than large centralized exchanges have the available capital to offer meaningful guarantees of this nature.
In addition to the negative consequences of the anti sybil measure, it is also unlikely to actually work. The incremental cost to large operators to split their operation into a number of smaller validators is small, even if they do so on diverse infrastructure. Many large operators already operate hardware in multiple physical locations and spread cloud based operations across multiple providers. In the context of the high operating costs of these entities, the incremental cost to split their operations would be small.