Part of what drives altcoin innovation is the chance for profit (I guess this drives a lot of innovation). Since Bitcoin sidechains are pegged 1-1, there is no chance for a lot of profit on each sidechain. So if you are starting a new altcoin, what are you more likely to do, create a sidechain where you can't make any money or create a separate currency with all kinds of potential?
In fact, much of the same incentive is what is driving the desire to make everything a sidechain. People who are invested in Bitcoin want to keep interest and value there, which is more difficult when altcoins pop up. But why should Bitcoin be the currency, other than it was there first? When you look at some of the PoS coins which are energy efficient and have 10 second blocks compared to Bitcoin's energy-using mining and 10 minute blocks, you have to wonder what would be a better tech going forward (and yes I know about the possibility for attack on PoS coins).
But thankfully, we don't have to put all our eggs in one basket. The current system where multiple exchanges exist where you can go from one coin to another very quickly seems to work pretty well. Does everything need to be pegged to a single currency?
Second, people need to realize that you can't easily decentralize everything using Ethereum (when it exists). Each node will have a relatively small amount of memory and computing power on it in comparison to more centralized servers and will be slower/more expensive for the same reason. So one example people have used are decentralized exchanges. Wouldn't it be nice instead of having centralized exchanges which can be hacked, corrupt, etc (MtGox), just make them a contract on Ethereum? Sure, if you are okay with making each transaction on your decentralized exchange relatively slow and expensive compared to a good centralized exchange.
These kinds of issues will be run into more and more once Ethereum is usable. A lot of things would have seemed like a good fit for decentralization but it is just easier and makes more sense to build a centralized service. Of course Ethereum also will open up a lot of unforeseen avenues as well.
Thing is, sidecoins, Ethereum, etc, don't exist (at least not as a live, fully-functioning implementation). Most writings about either right now are "this is what will be possible", "this is what can happen", the dreaming stage. We need to see these things out in the wild to get past hype to reality.