The original point about a benevolent dictatorship being the ideal form of government is, in my opinion, true. Having a single point of decision means that issues are dealt with quickly and efficiently, the 'benevolent' part means that the needs of the populace are heard and addressed, oppression is eliminated wherever it can be found. A truly benevolent dictatorship looks a lot like a well-run democracy.
The problem comes when the benevolent dictator dies peacefully in their sleep. Or when other parts of the government begin to realize that they can feed the dictator lies in order to get what they want. Or when the dear leader starts to get paranoid. A benevolent dictatorship only works briefly, after which the 'dictatorship' part starts to become a real problem.
Or if 'benevolence' includes religious extremism (although I would argue that a leader like that wouldn't count as truly benevolent).