I think that it is for the most part fine. It’s like saying “is it ok for weth to be 90% of all wrapped Ethereum?”
What matters is the details.
stETH doesn’t represent Ethereum that is staked with one single host - and that’s critical.
I think that if Lido continues to focus on ensuring that there are safety measures on having ETH staked with as many diverse entities as possible, incentivizes governance participation, and perhaps adds some level of fail safes to ensure each validator host can temporarily halt a potentially harmful action short term, then there is no reason we can’t be comfortable with it having the vast majority of staked Ethereum.
In its current implementation, I already feel mostly comfortable with it, but I am sure there are things that can be improved significantly still. Those can and should be explored.
None of those seem to rise to the level of needing to self-stunt growth.