I've seen the IFM do a lot of quality control when it comes to specific concepts, most notably concepts like LCNs and cartels. I've also seen them restrict certain people from continuing to start concepts when they've time and time again fail to uphold a standard that is expected of their faction. So I'm not sure if you can restrict it any further without affecting the factions that exist right now.
As far as how this would affect the server as a whole, not everyone wants to be a part of the concepts that exist right now. The unofficial factions thread exists for people who want to branch off and start their own concept without feeling pressured or forced into the lore of another, they'd much rather try a concept of their own creation. I don't think this is necessarily a bad thing for the server because it does open different avenues for other players. Sure, they're not all going to be shine with quality but that's what IFM is responsible for, and I think they're doing a pretty decent job of it so far. And for every faction that's started and ends up crashing and burning, there's another that actually has something to offer to both the legal and illegal scene.
This is kind of a moot post, because it's a public server with every single application process in the book. There's really nothing else you can do to try and prevent someone from screwing up a concept or character. The most that you can do is appreciate and praise the ones that are doing a great job in portrayal and when it comes to how they shape server continuity.
