As well as the real problems (services, planning permission...) in expanding the use of the canals for residential purposes, the elephant in the room is that this is a tiny drop in the very large bucket which is the shortage of truly affordable housing in the UK -- a need which used to be met by council housing at well-below-market rates as a social need, but not any more... 😞
Filling up the canals -- at least, near towns and cities and villages which is where most of the CMers (yes I'm going to use that term, I think everyone knows the meaning) want to moor -- with end-to-end boats would meet rather less than 1% of the UKs need for cheap housing, while making them much less attractive for boaters -- hire and owned -- who want to move around the canals, and who bring more desperately-needed money to the canals than the CMers.
So it doesn't solve the housing problem and would have a big negative effect on the canals, which doesn't look like a good deal to me, or I suspect most others who love the canals.
I'm not saying that CARTs current license/mooring policies couldn't be improved, but thinking that allowing mass uncontrolled mooring would magically provide lots of homes for poorer people seems deluded -- the solution to this problem is for the government (directly or indirectly) to restart building large numbers of truly affordable homes which are not then sold off to tenants or private landlords.
But this is unlikely to happen with the current makeup of the government because it might lower house prices and depress rents, which is exactly what many Tory MPs (who are private landlords) don't want to happen -- look at their caving-in on leasehold and rent reforms... 😞