Because smaller teams could not afford it. Thus you'd end-up with a handful of teams competing which would probably translate to half the cars you see on track now. Diversity in any sport is what brings in fans and sponsors. Three to four big names competing with each other with no one else on sight could kill F1, or any sport for that matter.
on the other side, if there were only 5 top teams with 4 car each, competition would be much closer than it is now...
Look at how it is now: Mercedes has one official team, one unofficial (racing point) and a third "hidden" team, the former Williams. Where is Toto Wolff going after the announcement that he will leave Mercedes? and why you say Williams? (Wolff has bought shares of both Aston Martin - former Racing Point - and Williams)
That's 6 Mercedes cars, but only 2 allowed to go fast and win.
Ferrari-Alfa Romeo are in a similar situation.
I say let them race and see what happens.
Put the human factor back by having less cars, but with similar performances.
