>Can't you see this defeats the whole purpose though? By this logic, traditional banks are also decentralized because you can also take your money out and go to a different bank.
The point isn't that centralized exchanges are decentralized, but that the network is decentralized in spite of the existence of centralized exchanges. Crypto provides financial democratization by way of an open permissionless financial network. Large entities can't collude to lock in customers or lock out competition. Centralized exchanges offer convenience over the base network and so they see a lot of use. But your freedom to transact with the network can't be taken away by centralized players. There is no analogous "base network" when it comes to bank transactions.
The point isn't that centralized exchanges are decentralized, but that the network is decentralized in spite of the existence of centralized exchanges. Crypto provides financial democratization by way of an open permissionless financial network. Large entities can't collude to lock in customers or lock out competition. Centralized exchanges offer convenience over the base network and so they see a lot of use. But your freedom to transact with the network can't be taken away by centralized players. There is no analogous "base network" when it comes to bank transactions.