I don't think they should put any restriction on the density of fires. I have seen some neat terraformed projects by players that have a few fires quite near each other. Just because some people will be tacky (11 fires for one guy is a good example) isn't a good reason to take away everyone's freedom. It's the freedom to express your own imagination (ex. building fires where you want) that has brought so many people here.

Also, fires don't currently consume firewood. There will be WAY less of them once that feature is turned on. I doubt that single homesteader will be able to feed his 11 fires for long.