I would think the admins would make slashing decisions

It’s important that slashed funds are destroyed, not sent to anyone in particular. This ensures there is no way to profit by slashing unfairly. A malevolent admin could decide to start slashing for no reason, but they’d ruin their own server eventually as users left.

There may also be ways to curtail the admin’s slashing power (ex: require 2 or of 3 admins to slash, or limited number of slashes per day) which could also be programmed into the contracts

And even in the worst case where an admin goes rogue and slashes the entire server, you’re just out $10. It’s not the end of the world

If the same thing could be accomplished with a traditional payment system, would that change your opinion?