I think there should definately be more labels.
I know a guy who is supremely talented but got knocked back by Steve Smitten because his style was "too old style acid".
He started his own label, got the devilfish modification - most releases sold right out.

Plus for dj's breaking through, its good if there's always new labels coming out. If you know your stuff you can be playing tracks nobody else has. EVERYONE buys Routemaster, Cluster etc. Some djs get promos well in advance. How are you going to stand out with your own style if there's only a handful of labels churning out releases?