We have heard a lot of people say Steem is barely decentralized. Also I think it is a bit of a strech to even call Hive decentralized (It's just more decentralized than steem).

You are right if the platform was truly decentralized, it would be harder for governments to hold it accountable. But we could end up with them just making it illegal. If that happens, it won't be popular.

Also, people can still steal from decentralized entities. For example, there is 63million Hive in the dao account. If the witnesses just decided to suddently divide it amongst themselves in a quick hardfork, we would probably take actio. This is also why I think if Bittrex just goes with the Steem consensus, they could be breaking the law.

A good example from the non-crypto world is populism, or tyranny of the majority. Even legitimate democratic states break international law all the time.