We can do something like that yes. Also, I don't think we need the 300 blocks away from spawn to use TinyWE limit anymore. It can be slimmed down to like 50 blocks away. Due to a regenerating world, the original reason for the restriction can be scaled back a lot.
Back to the topic, I suppose the reason against this is because I don't like nether materials becoming more common. Things like glowstone and such.