Agree with you here, could dilute the market a bit, especially with the decreasing user numbers.
The only problem is that flooding the market too much could make thousands of players overnight worthless. That would be fine for teams that have good player assets but for a new player who is in the first few seasons, their rosters full of 10k vets and scrubs would suddenly become worth nothing, making the game in the first few seasons even more reliant on just building arena for income.