I think the top would like more competition. We all pine for the days when it was. Back in ages 15-30 or so, it meant something to finish in the top 100. Then until around age 40 it meant soemthing to finish in the top 25 or so. Then after age 50, the top 10 was the better standard.

In terms of penalties, I think that would be hard to stomach. I am not sure many players have the internal emotional strength to "lose" to an unpenalized kingdom who would give out a "woohoo we beat [insert elite kingdom]" and not start the resentment war "that is only because we are so heavily penalized you nubs!" See? So I don't think penalties work well.