Are fiat currency pegged cryptocurrencies a viable and practical option?

Absolutely not. That kind of pegging means you have to trust the people behind it (who are unregulated), meaning those people are guaranteeing a certain price by buying or selling at that price. Meaning they are easy victims to market manipulation, meaning they are guaranteed to lose money, meaning they will stop guaranteeing the peg, meaning you will be stuck with worthless fake-dollars.

Something like that would only be trustworthy if done by a large bank or central bank where they control the issuance and keep a 1-to-1 backing with "real" Dollars or Euros. And even then insofar you trust that (central) bank to not go bankrupt.

Are there better ways to attain such value stability while sticking to decentralized digital methods/assets?

I guess you could go short or use options to cover your exchange rate risk, but that means you'd have to put the Bitcoins on some exchange and exchanges are a risk of their own as they often get hacked or go bankrupt etc.

Maybe once the ETF trading kicks off, you could hedge your BTC position by shorting some ETFs. There you're trusting the ETF provider and exchange/regulators I guess, but if they screw up you probably have bigger problems anyway.