The budgets of F1 teams, in USD, was approaching astronomical levels to where only a handful of teams could ever justify existing. It would be impossible to fill even a third of the starting grid. If were allowed to continue, you'd have teams burning $1B+ per year.

The other limits have mostly been due to encountering the laws of physics and how it applies to humans. G-forces are limited as a part of car design to ensure the drivers don't black out in the corners from the extreme lateral loads. Pressure suits like fighter jets don't help you, because at least in a fighter jet the G-forces are top-down. Humans have been a weak link on Formula 1 since the mid-to-late 90s.

People want actual competition, underdogs, suspense. Not having the guy with the biggest bank account win invariably and predictably. They want to root for a human, not an operating system.

And nothing stops you from creating a new "F0" association with no rules, you just have to find a way to finance it and have people watch it.

If the FIA thought removing those rules would make them more money or bring more viewers I'm pretty sure they would have done that long ago...

In recent years, a lot of parts of the car are of a fixed design, and cannot be changed except for safety and reliability reasons. This includes the engine, the wheels and the main chassis monocoque (the latter is homologated at the beginning of the season). Chassis homologation caused a lot of teams problems in 2011 during the "f-duct" episodes due to teams having to find all sorts of clumsy workarounds to accommodate the ducting for the device without having designed space and openings for it in the homologated chassis.

Even the freeze on engine design (since 2007-2008 ish), has seen things like ferrari spending ridiculous sums to ostensibly improve the reliability of their oil pump, and oh, look at that, as a side effect, gain marginal amounts of engine horsepower.

Racing stresses components to their limit, on purpose, and fans don't like it when races are decided by attrition. So even well meaning attempts to limit development and restrict spending often fail. If someone has the money and the will to gain a slight advantage, it's hard to stop. Even templated designs and string limits on what development is allowed doesn't stop people from spending vast sums of money in search of tiny gains. Nascar is good example of this. While not all the spending is at the individual team level, you have large collectives and manufacturers doing things like designing their own suspension dampers and various engine optimizations. It's still extremely expensive in aggregate.

It seems like you'd need a huge amount of regulation on the teams R&D process to prevent extra money from somehow being spent.

That's the problem. F1 cars that travel 500mph are not safe.