Not “anyway“ but because of the hack. TheDAO was done for after it was hacked. The code was too bad and trust was gone as well. That was clear pretty soon.
The only thing to decide was if they would let the hacker get away with at the time 15% of the whole supply. If they did that it would have endangered the decentralization of the eventual proof-of-stake switch.
Technically, there was no rewriting of history. Just a single (but very large) transaction was added to the consensus rules that (IIRC) replaced the TheDAO smart contract code.
Given that this incident resulted in the Ethereum/Ethereum Classic split, the "centralized cabal" was not very effective. The community voted with their feet and many went to Ethereum Classic.
You have to specify what kind of decentralization you're getting at.
The distribution of ETH was less decentralized before the hard fork than afterwards. 15% of the whole supply in one hand is quite a concentration in the distribution.
Because 'code is law' is a terrible expression to begin with. Law can be expressed with code, but law is ultimately a construct of human consensus. In the case of the DAO hack, the human consensus forked away from the bugs in the code.
