This isn't really decentralization is it?, it's a new kind of account linking which requires one to trust the central verification authority.
Maybe I'm missing something.
With regards to decentralization: keyoxide doesn't hold the proofs. Your key does. You can take your key to any verification system, whether it is keyoxide website or some CLI tool or an app, and have that verify the proofs. Yes, you do need to trust the service. But that's where the open source and hopefully one day, network effect comes into play. If enough knowledgeable people trust it and talk about it, then less-techy people might one day too.
In the end, what is important to note is this: keyoxide is just an implementation detail. If soon a different service becomes much more popular and used, the "decentralized identity proofs" ecosystem still wins! I would love to see apps get developed where anyone can at the press of a button verify online identities. That will be the next big milestone.