First and foremost what we're talking about is competitive waterskiing which I believe is fundementally different than just cutting up a lake (with or without a course). By design the tournaments especially at the higher levels - state, regionals and nationals - should be structured to be competitive. At the same time, these tournaments are revenue sources for the sponsors/tournament directors - clubs, states, regionals, nationals.
Finding the balance between economic goals, competitive goals and promotional goals is difficult to say the least. We're a self-funded sport for the most part with an age-based competitive system and limited market.
Generally speaking our 'system' has been pretty much the same for a long time. I also think there are different motivators for different people at every level. Some folks will go to the regionals/nationals to win, others will go because they finally qualified and still others just enjoy skiing, tournaments and/or the people. What's mostly common however is people go to ski and not to watch or browse the sponsor booths (with some notable exceptions of course).
Point I'm making is to grow I believe the focus should be on growing more participants which means bigger tournaments and not more restrictions. That path tends to dilute the competitiveness and certainly runs against legitmate logistical challenges.
So let's think out of the box - As has been pointed out in other threads, we're largely an age-based sport and not ability based. MM/OM/OW are the exception and, in reality, are all virtual divisions which can be minipulated and/or created as needed. What if our regionals and nationals were all open tournaments open to whomever shows up and pays an entry fee (and the obligitory USAWS membership etc.). Everyone, regardless of ability, skis in their respective age groups and placements/awards are handed out accordingly. In addition, there's a virtual scoring system taking place whereby the "elite" skiers of that tournament are allowed to ski in the "Open" divisions (ability based groupings - OM/OW, MM/MW, etc.) on the last day or two of the tournament. Think an age based Nationals with the "US Open" on the last day.
So what about logistics - "too many will compete"...we need the numbers to go up to be sustainable. Who says we need to hold the nationals (or regionals) at a single location? Let the US Nationals be held at 3 locations simultaneously. The dates are the same as are the schedule of events. Each location has a "site winner" and there is an overall winner. Things like ties can be run-off at seperate sites as well. Since the locations are known well in advance and there wouldn't be any restriction to where you ski, things like weather and conditions are the skiers risk. If you don't like site "A" then go to ski at site "B" instead. Other sports with similar growth issues - like trapshooting - have done this successfully for years at least at the regional level.
Other, perhaps more controversial, tactics to increase participation can include skier funded purses. Again using trapshooting as an example, there are multiple optional purses which cost $5 or $10 that pay out only to those participating in the purse. Some are ability based - the "class purse" pays to the top 1 (or 2/3) score in an individual class. So for us, all class 8 skiers ski against each other and the top score wins (probably NOPS points or something). Other purses like the "Lewis purse" pay based the scores at that shoot/tournament and to some extent everyone has a good opportunity at something. Attached there's a PDF which explains it in more detail.
Other ideas include things like Calcutta's which is an auction with 50% of the funds going to the participant and the other 50% going to the "buyer" of the winning participant(s). Or develpment of a handicap system similar to golf where your practice "performance" is self reported and can be used to develop some really interesting tournament formats.
The goal is to increase participation! Never before have there been more tournament capable sites. More of the same hasn't been the answer...maybe some new ideas (or borrowed ideas) can make a difference.