I think another side effect of this is increasing the long bias markets already have. I could definitely see being short the market becoming a very dangerous proposition. Price discovery is a lot more difficult when it becomes costly to short things and I can only see this leading to greater volatility and heightened market crashes. Related to corporate governance, Chanos [1] shows the importance of short selling through Enron.

[1] https://en.wikipedia.org/wiki/James_Chanos