Oracles are systems that provide a blockchain with information from the real world. It allows a smart contract to access 3rd-party data — such as, political events, weather, or stock prices. Oracles are links between on-chain and off-chain data while serving as significant elements in the blockchain ecosystem.
The purpose of oracles is to increase functionality for smart contracts by improving the capabilities for accessing external data. But, this leads to many setbacks. If you want to import data from a particular source, node, or API, you basically destroy the complete purpose of blockchain.
Centralized oracles imply that a single entity has control over a smart contract, thereby making it similar to regular contracts. Furthermore, centralized oracles — even those with the best intentions — can be subject to hacking attempts. In addition, they are also vulnerable to concerns of updates and lack of maintenance which can lead to disastrous circumstances.