Following the transactions quickly breaks down. Almost every transaction is actually 2 transactions, one to a new address that you still control by your wallet and one to the payee's address. If you really think it is trackable I'll challenge you to track my purchases as a test.
As for decentralization vs centralization. If banks asked me to sign up with my public key and didn't ask for my name or address or identification number, then sure. But the fact is that they do. The fact is that they are infiltrated by the NSA, et al. A direct result of decentralization is the absolute need for privacy, otherwise the system breaks down.
People have published papers on breaking bitcoin anonymity. It wasn't trivial, but over a long period of time they could identify people with decent probability of being correct.
As for decentralization vs centralization. If banks asked me to sign up with my public key and didn't ask for my name or address or identification number, then sure. But the fact is that they do. The fact is that they are infiltrated by the NSA, et al. A direct result of decentralization is the absolute need for privacy, otherwise the system breaks down.