I think in that case they would have make another world which could be a lot more work for GMs, because without it, it would be to much crowd even with all channels active. It also would change economy, no idea if it would be better or not but big change for sure. Personally I prefer Royals like that, there's enough people atm.
Having more of less people wouldn't make the server 'better' in my opinion, that's just a number. If Royals has got a great reputation and it keeps growing up daily it's due to the close threatment that the people gives to each other. I've been playing an official server not much ago for a few years, it had more than 10k players and the forum from there was quite cold and full of hate, too much drama imo.