Resiliency: Centralized proxies can suffer from shared failure domain issues (especially when large number of configs, etc., are deployed).

Performance: Side-loaded proxies tend to perform better, in part because they deal with a subset of config.

Our choice of sidecar deployment was informed by on our (Google, Lyft) experiences with both centralized and sidecar models. However, that being said, Istio is not predicated on per-pod deployment.