Fatman, you mine. I wouldn't consider you a threat to decentralization. What size blocks do you figure would keep fees low and keep you running smoothly? If prices are higher, is there more competition for txn's? Or will small mines have a harder time solving blocks?
*sorry for all the n00b questions. I've just been informed I'm on the verge of hero status. I still know nothing.
Block size isn't a huge problem for regular miners. As CConvert2G36 points out, I only send my hashes and receive work from the pool. We're talking about tiny amounts of data. The pools can afford to pay for decent internet and/or a hosting service.
The "real" problem is the non-mining nodes who don't get paid to transmit transactions. But I think you and I pretty much agree here. There's enough decent internet in the world to keep the network running with far bigger block sizes. Storage is getting cheaper and cheaper. HW in general is getting cheaper and cheaper. If you live in an area with shitty internet you might want to avoid running a node. But those areas are getting fewer and farther between.
Some "anecdotal evidence" might suggest that people are running their nodes over wifi, which I would strongly recommend against if you want to use you internet for anything else.
In any event, when Bitcoin becomes more mainstream we will see regular computer nerds start firing up nodes. We're talking about a sizable group of individuals who'll spend as much as BJA spent on his "swampnode" on a keyboard.... with fancy buttons with programmable led's (Fingers crossed. Bring it to me Santa!!!).