If you change PoW to only remove asic mining capability, that won't stop someone throwing up racks and racks of computers in a datacenter in China again.
Racks of computers in datacenters is a given, but why only in China? Thanks to the universal availability of DRAM, those racks can now go up all over the world. That's the key difference.
China has very inexpensive power, so they can run more systems less expensively than elsewhere. However, I get your point, while it's not the silver bullet it would certainly help level the playing field again, at least for a little while.