Just looking at this as an outside observer, it seems that you and others are missing one big point, and that is the fact that boat numbers aren't static, they are constantly increasing. While there may be room now for all the CMers, how much room will there be when their number doubles, and when that number doubles again? The canals are a finite resource. There is only so much space available and that space will be filled with CMers if nothing is done to prevent it. If there was never going to be another boat wanting to CM in London, then CRT could be more lax with enforcement. However, the fact of the matter is that the number of boats is increasing exponentially and CRT, as a matter of necessity, has to think of the future and how to keep numbers manageable and keep the canals from becoming one big parking lot.
Are there flats or apartments available in London that are comparable in size to narrowboats - 200 - 300 sq.ft.? If people are willing to live and raise a family in the small space offered by a boat, perhaps a partial solution to the housing problem would be to offer apartments of similar size.
What's happening on the canals is just a symptom of the greater woes facing society. The biggest problem is income inequality. Wages have not kept up with inflation for many years. Meanwhile, governments have stacked the deck in favor of the wealthy and against the working man and woman.This isn't the place to discuss all the woes of society, but it bears mention that there simply isn't enough space on your canals for them to serve as the housing safety valve for all of those woes.