I think that instead of setting a max number of designers, there should be a limit on the number of entries allowed per contestant. Maybe this limit should be set by the Contest Holder to match the type of contest. Or, if a certain number is decided on, you could just allow the CH to grant more entries to certain designers.
This would force designers to withdraw their poorer designs if they come up with better ones and it might also get people to put such frivolous things such as color variations all on one entry.