I think it should be able to join factions freely. Ya maybe restrict it a bit, but cmon, it should be more then 2 system owning factions.
And no Hood, I wouldn't say we have all these characters for the action. I do it for the Roleplay. Because each one of my characters has a different story, a different tag, and different ship, and entire different RP from all the rest.
Also it helps to keep the Server/Game alive. Think about it. If we were restricted to only 2 factions, I would of quit this game months ago. But I didn't, why? Because there will always be something to do, because there is a lot of RP to go around because you have a variety of characters to roleplay with.