How can they not dictate monetary policy? They could conceivably cause inflation by increasing mining rewards or perhaps deflation through coin destruction.
Miners don't decide what software other people run, that's why. If a miner tries to mint themselves more Bitcoin than they are due, then their block will be rejected by the network.
The scenario in question is when a small group has control of the network through consolidated hash power.
> Miners don't decide what software other people run