I disagree. You need the judges to be dedicated to the competition in order to have a large enough judge pool. Right now, there is little incentive besides 'taking one for the team'.
As a judge, why would anyone voluntarily give up a whole Saturday and/or Sunday, potentially drive a couple hundred miles, to judge a bunch of beers when he or she couldn't get their entries in before the cap kicked in?
If the judges had the proper incentives, you could hold the competition without artificially imposed limits on entry numbers. If you had the proper incentives, you'd get more brewers becoming judges.
The bjcp has an excellent system for people to become judges, and if there were a reward for becoming a judge, such as an early entry period for the NHC, then you'd get more judges vested in the NHC and you could run an unlimited entry competition. That would truly be a National Homebrew Competition, instead of a "Lucky Enough to get an Entry In Competition"
But then there is a chance that the competition becomes a competition of judges.