Also a centralized Germany would be able to focus on building up its infrastructure and could focus more on commerce and developing the land and cities without having to be constantly worried about fighting wars internally. Also by focusing on external war the kingdom has a safety valve for its aggressive young men and nobles.
Well we could still see French like religious conflict within the state despite centralization if one side on the Reformation tries (a pretty plausible scenario in my opinion) to suppress the other other. A Huguenot type war inside Germany would probably set that kind of development back significantly. It would be interesting to see a timeline where a united Protestant Germany is fighting Catholic rebels at the same time France is doing the same against the Huguenots. That would make for some interesting developments.