Wouldn't those with ownership in a system be best trusted with the self-interest of such a system? That seems to be the best alignment of incentives.

Sure, and Regular Money is best governed by billionaires. Incentives line up nicely if you're already rich.

What was the point of BTC and ETH then? We already have the system you describe with fiat currency and traditional banks.

32 Ether or mining equipment is nothing compared to what you need to have any real influence over fiat money.

There are additional goals including in part censorship resistance and it can't be seized without the keys.