Centralized wallets are so that clients don't need to download the whole blockchain locally; this will always remain a challenge for blockchain tech, unless there's a p2p version where everyone in the network only needs part of the blockchain, or there's some other form of smart sharding.

Centralized exchanges will remain a thing for rapid and cheap exchange; Bitcoin in particular has the flaw that it's slow and expensive to transfer between wallets, so the exchanges provide a fast alternative. You give up the decentralized nature in favor of fast and cheap transfers between wallets and currencies. This is more for the traders though.