The hardware expense per node is very minor compared to the cost of 32 ETH, so it's a weak incentive to consolidate.

Weighed against that, the slashing penalties per node increase, the more nodes fail at once. That gives an economic incentive to decentralize.

The validators have staked 32 ETH to the network. If they stay up, they get rewards. If they go down, they get hit with penalties. This incentivizes building a reliable system.

Is it sufficient? I’m not sure.