Egocentric Speech may reflect syncretistic thought, it may signify the internalization of speech, and/or it may be a form a speech practice.
So who is right, Piaget or Vygotsky? I don’t think that it has to be an either-or situation with these theories.
Frankly, I can think of a third use for egocentric speech, which I have observed in two and three year old children.
That is, speech for practice. I have heard children repeating certain vocabulary and/or grammatical phrases which they have recently learned.
I have even heard young children practicing substituting different words into a grammatical structure. The child might say, “Wash the baby; wash the dolly; wash the dog; wash the frog; wash the bird; etc. This verbal play serves the same purpose, I believe, as practicing shooting baskets achieves for a basketball player.