I only accept solutions that don't affect decentralization.

2 MB blocks (Bitcoin Classic) don't affect decentralization, if you support SegWit. SegWit blocks can be 4 MB, and that is 4 MB of data that has to be transmitted over the wire and stored unless you weaken your security model.

In fact, SegWit negatively affects decentralization because it is much harder to build and maintain your wallet because of all of the complexity of SegWit, pushing people to crowd around existing solutions.

The worst-case performance of validating a block full of SegWit transactions, which is the only way you'll hit 4MB with SegWit, is actually a lot better than the worst-case performance when validating a block full of non-SegWit transactions. The original design of Bitcoin had an unfortunate flaw where the cost of transaction validation could increase quadratically with transaction size. SigWit fixes this to be linear. (As it happens, Bitcoin Cash copied this fix, which makes it just as incompatible with existing wallets as SegWit transactions; arguably more so in fact, since by the time that deployed a lot of wallet software had implementations already.)

Fortunately, the original Bitcoin Classic kept a 1MB transaction size limit, making the worst case scenario 2n instead of n^2.

That's why it was such a compromise. In order to get the massive decentralization and privacy boost of the malleability fix that segwit provided, the blocksize increase was included to give the increase that the classic hard-fork suggested. And it was done as a soft-fork too, which means none of the 160,000+ bitcoin nodes needed to upgrade their software.

And what happened? After they got exactly what they wanted with the doubling of capacity, they said "we want more" which demonstrated the entire exercise had nothing to do with blocksize, but about stealing the blockchain away from its users, and centralizing it in their data-centers. Which is why, months after the segwit implementation, the biggest and loudest people clamouring for a capacity increase for years, which includes bitpay, the subject of this thread, and coinbase, which has been an actively undermining the bitcoin developers for years, have not even implemented the blocksize increase. So much for blocksize being important.

Privacy boost for a malleability improvement? Do tell.

All full nodes had to upgrade or risk mining invalid blocks.

Nodes don't mine. There are still many nodes using old client node software. Look.

http://luke.dashjr.org/programs/bitcoin/files/charts/softwar...

I don't think you really understand the relationship between nodes and consensus.

>nodes don't mine

Hmm that's not how it used to be. You must be talking about something other than Bitcoin.