Your thoughts are logical. I think it would be healthy if 20-30% of the marketcap coins top 2-10 would for the largest part would go to BTC and the rest to > top 50 coins.
Greed has decreased BTC dominance in my opinion. BTC just does not go x10 in the short-term. Newcomers want this x5, x10, x100 so usually sell off their BTC to chase those insane profits. The story ends at some point either with not having found those profits and being disappointed or actually having made those profits. More people would like to find a bit more safe haven for their profits, but don't want to go out of the crypto space. A store of value like BTC (or maybe LTC and Monero?) seems like a good option then.
After a while in BTC people get bored and will start going for the alts again :-P
You are bustin out the truth right there, let’s see what happens lol