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A system where everyone has to wade through a bureaucratic mess occasionally is certainly not dystopian.

A system where only a handful of people have to wade through a bureaucratic mess with alarming regularity can get very dystopian very fast for those few.

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Serious question, which is better though?

Where possible, distributed is almost always better. Comfort and convenience, like all forms of currency, have diminishing marginal utility. Therefore, distributing the costs minimizes the net human suffering.

There are always edge cases. That's why they are called edge cases.

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