I'll try and answer your questions.
1.) When the site was set up (well before I joined, so someone can correct me if I'm wrong), there was no limit on the number of games you could play. It was 'pure' - no points etc.
This changed to introduce points. One of the significant reasons for this was that some players were playing 40+ games, and this lead to a huge number of drop outs and civil disorders. Basically, people joined games, and if they didn't do well, dropped out and started another.
Introducing points meant that as a new player (who were more likely to drop out) you could only join a maximum of 20 games, at 5 points each. In fact, from what I have seen, and I may be wrong, most new players enter significantly higher points - 25+, so they can get more points and move up the list more quickly.
The other advantage of points is that they help to rank, and add more 'spice' to games - you are more likely to invest more time and effort in a game if you have a stake of D's in it.
2.) PPSC is like a 'break the ice' system for entering into Diplomacy. You must remember that a large percentage of players come to this site 'blind'. They have never played before, so giving people a chance to get stakes back is a bit kinder. Also, I think there is a problem with initiating WTA only, which brings me to:
3.) WTA only - probably purer, but I believe there would be a problem instituting this only instead of PPSC. Someone might be able to let you know more about this - am afraid I don't know.
3.) No ideas - you'll have to speak to a programmer. Please bear in mind that Kestas doesn't check in so often these days as he used to, so programming is going at a slower rate than in the early days.
4 a,b,c) I think there is a choice here. Dip was a great invention as a game, but who is to say that you cannot regard PPSC as a variant, in the same way that Gunboat, Touch Diplomacy, UN Variants etc are? If people want to play PPSC, let them. If you want to play WTA, you can, as we've explained before, start one yourself, or if you don't have enough points, ask someone to do it for you. We'd be happy to oblige.
I personally don't see the need for change. The points system works as it intended, and there are now 2 systems for ranking players - Points, and the ELO. I feel that the ELO is sidelining points among some of the more frequent players, as they seek to move up that list by skill, rather than by points.
Hope that helps - I know it's not comprehensive, but at least it will give you some idea of the thoughts of some of us!