A large part of the problem is again a flaw in bitcoin itself. SHA256 mining is extremely GPU unfriendly by design, whereas most other cryptocurrencies use scrypt which is much more applicable to the GPU model. As a result, ASIC hardware to do SHA hashes to compute blocks in bitcoin became by far the most efficient hardware to mine bitcoin, but because it is custom it requires a ton of money to fabricate. So you see hundred million dollar mining operations emerge because only they can afford the fab run on a custom PCB to do SHA256 hashes.

In theory, Litecoin would not have the same pandemic ASIC runaway market control problem. GPUs would still moderately competitive, and act as a counterbalance that normal users have available to them to mine. There would be custom scrypt hardware, certainly, but it would most likely not have the insane performance advantage over general purpose computers that SHA algorithms have.p

To fix bitcoin itself, you need to commoditize the hashing hardware used by the best in the industry. If everyone had access to the ASIC's bitfury were using at reasonable prices normal people could afford, people could distribute the mining more, but as it is most of these vendors are using in house solutions that dramatically outperform off the shelf bitcoin mining hardware.

Maybe spending $121M of VC money whipping up hype about distributed mining...