NEO is currently quite centralized†, which is an easy trade-off to make for higher throughput (see the traditional infrastructure of the web). It may not become more decentralized in the future, but its consensus mechanism (dBFT) is not really proven yet, which is why they are playing it safe. They will continue developing it of course, as will Ethereum with its proposed and not-yet-rolled-out PoS.
Time will tell which one is safe. If the rewards are high enough, someone powerful/knowledgeable will inevitably try and break or cheat the system.
† Some people like to make a distinction between "distributed" and "decentralized". For me the former is part of the latter.
Cryptokitties is possible because of ERC 721, which allows for unique tokens to represent individual assets (having an indivisible kitty with its own dna). As far as I'm aware, NEO doesn't yet provide the ability to create individualized tokens that can be stored on the blockchain in a similar way.
ERC 721 just an API standard for non-fungible assets. There's nothing special on inherent to Ethereum that makes Cryptokitties possible.
You can totally build something Cryptokitties with NEO -- the only difference is that because there isn't a standard, there isn't a third-party marketplace for these assets. (i.e., there's nothing inherent about NEO that prevents something like Cryptokitties from being built.)
Time will tell which one is safe. If the rewards are high enough, someone powerful/knowledgeable will inevitably try and break or cheat the system.
† Some people like to make a distinction between "distributed" and "decentralized". For me the former is part of the latter.