Basically the problem is the same as the solution: it requires less computing power to run a validator. Therefore someone with tons of coin but controlling a relatively small amount of the attached computing power can exert undue influence.

They set the bar high, too. It requires $750 of computer to run a validator, but you have to stake $50k worth of coin. If it were just the computer, you'd have a million nerds running nodes from their basements. I guess they have to make the stake high enough that there is a real penalty for bad actors, but the value is discouraging what they claim to want. The solution to that was stake pools... which are themselves centralized (in fact, there's basically one that everyone is using).

Which does make the whole thing stink, IMO. I don't have a dog in this fight -- I own very little crypto and no ETH, but I spent most of the day reading about this.