Distributed programming is a means to an end, not a goal. If you had a computer with infinite cpu and ram and it could never crash and be geographically close to every customer, you would just use that and build your system on it as a dreaded “monolith”. Much simpler to grok such systems. Much easier to debug and monitor.
Say index funds become illegal, just for the sake of argument. Aren't they replaceable by an algorithm - trading software that balances a portfolio that copies an index per investor? It's less efficient, of course, but it's essentially the same thing. You get millions of tiny, cross-sector owners instead of few big index funds. So in that sense the argument in favor of banning index funds is really pointless. They're just one implementation of a strategy that investors could follow on their own, just less efficiently. Essentially, banning them is just a way of enriching brokers because of the expected rise in transaction fees.