Just wondering why the cap was dropped to 128. I would have thought a drop would be to 150 or 160.
Anyway we could have it at the suggested cap because now I can't play with my friends because of peak times of other countries.
Because it's either cap or lag. This way at least the 128 people on can play reasonably well. With 150-180 people on the lag gets terrible, miners can't mine cause rocks sometimes don't spawn, and other kinds of weird stuff.
You're gonna have to wait it out. Get some sleep / do work and try to get on when it isn't full, maybe. That's the best advice I can offer.
As I recall, Cannon state recently in the server thread (I think it was that thread) that the server instability issues only occur with greater than 130 people connected, and speculated there may be a lowering of the 200 pop cap to 130 due to that.