We also considered the situation where only beers that qualified in other competitions could be entered. Personally I think this goes against the spirit of the NHC, where anyone can win. I think the inclusiveness is one of this competitions greatest strengths. We rejected the idea of a dramatic increase in the cost for the same reason (+1 Kai).
We considered adding entries to each region, but many of the regions are already at the limit of what they can judge. We considered adding regions, but lack areas with enough qualified judges to judge 750 beers who also have organizers willing to shoulder the burden, and this could lead to problems judging the additional entries in the second round. We considered cutting the limit to 500 per region while increasing the number of regions, but this floods the 2nd round with too many entries to be judged effectively. And on and on and on.
I see this with national sports, the model works. You have to qualify in each individual sport regionally to compete nationally. Sometimes it means a weekend away to make it happen, but it's been worth the effort. The amount of national competition "fodder" is greatly reduced, the national level resources are still a bit tapped out but not overwhelmed, and I see more networking on the local level to have a larger impact on the national level.
Personally I've never competed with brewing and look to do so soon, but really looking for good feedback.