I would like to bring up this topic once more(im sorry) and try to evaluate on why the limits as they currently are, are...

1. not necessary (performance wise)
2. bad for the server in the long run
3. not ruining the economy if lifted

tl;dr at the bottom (in red font)

actual suggestions below that

on 1:

back in 2014 i was playing on the old AEM server which was developed way into endgame which means there were lots of gold, iron, cacti farms and most islands had villager trading areas (more or less beautiful xD), i myself came into the server when it was already developed to that point. at the end of the post i will add some screenshots showing as to what kind of dimensions farms can have on skyblock so you get an impression what this gamemode usually leads into (and what all of its fun is actually) of course everyone is free to play SB as he/she/it wishes.
when i (or we, me and my gf) came onto the server we werent experiencing any noticable lag (except the fact that we got a slightly higher ping due to being based in EU).

the server was actually using an early version of the skyblock plugin we are using today, it didnt even have any excessive ways of restricting stuff at all config wise. so basically the server ran on 2014 state of hardware servers with barely any limits at all and didnt have any noticable lag.

in early 2015 the SB server was reset and saw an inclining player count because everyone enjoyed a fresh start. a couple of months in, the server once again had lots of islands with 16 iron farms 4 times stacked on each corner of the island (islands were 99x99), gold farms spanning the entire island, redstone mob traps, auto sugarcane/melon/pumpkin farms, slime farms grabbing as many slime chunks as possible and so on....

again there werent any limits but mobs per chunk limits, slowed down hoppers and the clearlag plugin which helps with filled hoppers on any type of drop generating farms (removing everything that isnt sucked up by a hopper due to poor design).

at that time i was a mod for a couple of servers on the AEM network and the most time we had issues with bad TPS was usually on survival where spawners were allowed (usually it was poorly designed mob traps that had no afk protection as in: a way so mobs couldnt stack up when some person decided to be afk, MC actually introduced entity cramming which should help with such issues).

all in all my conclusion on this point is that a skyblock server doesnt need to have excessive limits to be running stable performance wise.

on 2:

having limits as restrictive as they are currently will be taking the fun out of SB because once you hit the limits for every entity, there is no real point in playing anymore since it will be hard to advance island level wise.

gameplay will become slow and you dont have anything to do really other than collecting drops from your farms and maybe just spam some blocks in some corner of your island that dont actually do anything.

this point will be quickly reached i can show from an example:

a solo player has only access to 10 villagers so he/she/it will prolly use them for an iron farm... after that working on iron farms is of the table and having villagers to trade with as well.

hoppers: so the same player already used 4 of his hoppers for the iron farm (common designs use 4)
leaves him with 26 assuming they will be used for a sorting system ... well thats 0 hoppers left and a half finished storage

assuming they be used for auto farms: 4(which is low imo for a farm) for each type of farm potato/wheat/carrot/beetroot... leaves 2

theres still a lot of cool stuff left that could be built using hoppers:
mob traps, goldfarms, slimefarms, melon and pumpkin farms, auto treefarms, sugarcane farms, maybe even some fancy auto disk farms or mob sorters, semi-auto animal farms, cacti farms, auto smelters, semi auto dye farms... and what else i missed

even if my numbers in the example are off (and i think they are actually set quite low) theres just sooo many farms you can build on SB but the entity limits restrict you to only a few and they cant even be nice.

most of the fun on skyblock comes from automation, having limits on crucial items for automation takes out all of the fun in my opinion.
so in the long run this will lower the amount of players playing SB, this was partly the case when AEM reset skyblock once again, the plugin was updated and the config files were just slapped on with all the default values (basically the limits we have atm).
the outcome of this (amongst other things that caused the decline of AEM) we see today
(not saying its bad i like that ECC took over the AEM style of Skyblock as it always was fun and had a lot of potential :) )

on 3:

i spent quite some time ingame and in the forum (yea i was stalking you guys :p).
from what i have gathered economy is a big topic on here (obviously, its in the name of this very server xD).
i have also seen reactions to suggestions considering removing or loosen the restrictions we currently have. people were afraid of the economy being hit by more relaxed limits.

skyblock economy can be very stable assuming you dont have many limits. due to the fact theres not many or any limits at all theres always demand for most items (having challenges requesting items that are normally not wanted also adds value to items that you normally just would throw away).

the most famous example for a stable price being iron ingots:

prior to the reset in 2015 as mentioned we had an SB server in a very endgame'ish state.
we also had a certain staff person that extended the island past the limits. old AEM players might remember that.
the person in question basically made the whole island a huge iron farm stacking as many as possible having hopper lines spanning the entire island and a huge storage to store all the iron.
eventually that player decided to quit the server and swamp the market with all the iron he had stacked up (most of the building blocks used were actually also iron blocks).
people were rushing to get their hands on as much iron as possible, as iron was always in demand. eventually all the iron was more or less evenly distributed amongst the server.

the actual impact on the going rate for iron ingots was incredibly small. most prominent reason being the fact that iron is a much needed resource for auto farms (hoppers and pistons) and also a decent block to gain some island points. so basically all the iron that was swamped into the market was placed down or used to craft items and never saw the market again.
new players coming into the server also usually have a demand for iron since it is kinda hard to get by when you just started and dont have a rank and dont want to wait til you are able to create your own iron farm.

so on one side theres a lot of competition from players keeping the going rate affordable but still have enough demand so it not actually becomes worthless.

other farmous examples for high demand items:

gold blocks (decent source of island points)
sand (even with advanced cacti farms sand was always in demand)
dirt (some players new to SB might have noticed by now that the most unwanted block on survival is a valuable resource on skyblock)
diamonds (decent island point value, used to repair or craft items)
fish (people are lazy when it comes to fishing xD)
any cobblestone derivates (building blocks, some just need tons of DCs to build their projects, new players can get a fair amount for a good price usually)
pumpkins, melons, seeds, sugarcane all had a reasonable demand keeping the going rates stable (usually demand caused by challenges, most of you guys prolly know by now what you can get for any of these)

i actually havent ever seen any item that had a hugely declining value.
with challenges there also is a way to take money or certain items out of the economy and replace them with things that never go into the market again (for example decorative items that add to the value of an island).

tl;dr (sorry for the wall of text)

1. performance can be stable without many limits
2. automation is the most fun of skyblock, having restrictions restricting automation is not fun
3. lots of open space in skyblock, lots of auto farms to make, new players coming in or people restarting, challenges = lots of demand for all kinds of stuff


my actual suggestions (yes there are some, i had to evaluate to show where i am coming from and what my experience is):

1. mob limit per chunk as opposed to mob limit per mob/island (there should be ways in one or the other config file), entity cramming is a thing in MC also ;)
2. no limits on any blocks, hoppers slowed down (maybe half speed) and monitor how it works out
3. redstone turns off when unloaded (i guess this is a thing already)
4. definitely no limits "per player on an island" this will turn away solo players (theres a reason why some people prefer to play solo as much as there is one for people to join a team) because they are being put at a disadvantage


finally id like to thank all the readers that actually went through all of this post :)
im sorry for not capitalizing im just so used to write everything lowercase.
also my native language isnt actually english (im from germany) so bear with me for maybe not having the best way of saying things.

and now the pictures i promised (all of these were on one or the other incarnation of AEM skyblock; there usually were multiple islands having those or similar designs):

almost 99x99 single layer cactus farm:


goldfarm (this is from survival, had a similar design with less open space in the middle on SB):


overly complicated melon/pumpkin farm on the left:


auto treefarm with auto leaf crushing and sapling return:


sideview of an island couple months in after SB reset on AEM:


example of cactusfarm stacked design (exported world download):


redstone and water based mob trap(exported world download):


small surgarcane farm(exported world download):

 

it was gold and emerald blocks for our island and the iron farms were eventually made of iron blocks. if it indeed is decided to not have certain challenges limited or have an ingame way of resetting them those kind of farms will pop up. on AEM we actually had all challenges unlimited before the reset with the default values plugin implementation.