There's no inherent reason to restrict the number of TLDs. The best way to combat rent seeking from registries is to allow any organization that has the technical capability to operate a registry.

Why do companies and organizations get special treatment over regular people? I think a simpler fix is just to ban any companies that register domains from squatting on them.

Were regular people prohibited from applying for TLDs when applications were open?

Not that I know many people who would have been interested in paying the fees.