This question already has an answer here:
Why couldn't have Dumbledore keep Harry with himself? I know about the charm that was on harry due to Lily's sacrifice. But if Harry had lived with Dumbledore :
Dumbledore was an extraordinary talented wizard as compared to other Magical families who could adopt Harry. He could provide excellent protection to Harry.
Imagine what the boy could have become. He could have been trained for what was waiting out there. Dumbledore knew that Voldemort was still alive and he also knew the prophecy that it was Harry only who can kill Voldemort. So he could have trained harry from the beginning.
The answer on the basis of which this was marked duplicate only talks about protection. But Dumbledore could easily provide that along with some other benefits as the one I mentioned above. And of Harry getting arrogant, I am sure Dumbledore would have looked after that.