Very true. Might have been better that way with a strong selection of separate majors and fewer regionals.
I would say that one of the biggest flaws with regional ITV was the disparity between the size of the regional companies. The large regions dominated the network both in production and taking the best timeslots with the smaller regions forced into local interest programmes, minor networked programmes, and conduits for Coronation Street.
When the 1991 franchise round was called ITV had only one terrestrial analogue channel. Developments in satellite, cable, and
DTT in the 1990s would have theoretically provided more outlets for smaller and medium sized ITV companies therefore helping to preserve some of the regional nature of ITV.
I think that the 1991 franchise round took place without sufficient realisation of future developments in broadcasting technology and these future developments are why a single unified ITV is not always a justified or inevitable product.
Even so, there should definitely have been more restrictions on mergers and takeovers between the big 7 (this includes the South and South East region and the Breakfast franchise) that are only allowed to go ahead with approval of the ITC - and possibly Parliament - until 2000ish when the situation would be re-assessed.