If we want decentralization, should we not focus supporting Single-stakepools with lower saturation?

Decentralization is a loaded topic that goes way beyond simply delegating ADA to small pools. Let me dive in for a minute:

A truly decentralized network must incentivize individual participants' behaviors in ways that promote its healthy functioning and long term viability. This is a highly recursive process, because in order to compensate for the inevitable evolution of world conditions, the very definitions of "health" and "viability" too must evolve over time. If the initial conditions are correct, and the first domino is knocked over just right, the result is self-stabilizing feedback loop, which is ultimately the goal.

All of this is to say that, it is unlikely that there can be one-size fits all solution for ranking a set of decentralized service providers (especially for core infrastructure providers like SPOs). These providers are in constant competition with each other, and may offer unique services/incentives that address a particular corner of the delegate market, but is irrelevant for the rest of the stakeholders. The recent sundaeswap ISPO applies to most stakeholders, but is still a good example - how do we rank the 30 participating pools in relation to each other? And harder still - how do we rank them in relation to other sets of pools offering different/additional services?

Even if Daedalus ranking was crowdsourced/decentralized (which it isn't), no ranking system can perfectly keep up with all the variables that may influence stakeholders' decisions. Such is the power and responsibility of decentralization - an entire community cannot rely on any one source of data interpretation. Daedalus ranking may be a start, but is far from holistic.

TLDR; spreading ADA across small pools helps to diversify L1 block production. Decentralization however is a meta-phenomenon that isn't represented by any one such metric. Decentralization is about doing what you, the individual participant, has reasoned to be best for the health and viability of the network.

If we want decentralization, should we not focus supporting Single-stakepools with lower saturation?

Decentralization is a loaded topic that goes way beyond simply delegating ADA to small pools.

A truly decentralized network must incentivize individual participants' behaviors in ways that promote its healthy functioning and long term viability. This is a highly recursive process, because in order to compensate for the inevitable evolution of world conditions, the very definitions of "health" and "viability" too must evolve over time. If the initial conditions are correct, and the first domino is knocked over just right, the result is self-stabilizing feedback loop, which is ultimately the goal.

All of this is to say that, it is unlikely that there can be one-size fits all solution for ranking a set of decentralized service providers (especially for core infrastructure providers like SPOs). These providers are in constant competition with each other, and may offer unique services/incentives that address a particular corner of the delegate market, but is irrelevant for the rest of the stakeholders. The recent sundaeswap ISPO applies to most stakeholders, but is still a good example - how do we rank the 30 participating pools in relation to each other? And harder still - how do we rank them in relation to other sets of pools offering different/additional services?

Even if Daedalus ranking was crowdsourced/decentralized (which it isn't), no ranking system can perfectly keep up with all the variables that may influence stakeholders' decisions. Such is the power and responsibility of decentralization - an entire community cannot rely on any one source of data interpretation. Daedalus ranking may be a start, but is far from holistic.

TLDR; spreading ADA across small pools helps to diversify L1 block production. Decentralization however is a meta-phenomenon that isn't represented by any one such metric. Decentralization is about doing what you, the individual participant, has reasoned to be best for the health and viability of the network.