Rugby is set to remain a closed 10 team sport for a very long time to come. I think if rugby wants to get even more competitive the national organizations of the Tier-1 countries need to open up their pro comps and find the best talent. Limiting the amount of spots on rep sides is not going to imnprove tier 1 countries at all. England are not going to lose anything by allowing a couple of foreigners to play each game for each respective team and the english side is not going to be weakened at all. England would remain just as strong as it is now if 50% of the premiership were foreigners.
Letstake the NHL in NA, some teams are 50% European yet nobody cares because the NHL is committed to going out and getting the best hockey players in the world bar none. MLB does the same thing going to places such as Venezuela, Puerto Rico, Cuba, Japan, South Korea, Taiwan, Mexico, Dominican Republic IOT poach the best players world wide for their teams.
England's league is open, all English teams field at least a couple of foreigners and most make up a third of their team more or less with them, and England's team is currently at something of an ebb and over the past couple of years has probably been behind Ireland and Wales internationally, both teams that do restrict foreign players in their league.
edit: Whether that's related is debatable of course, but suggesting that the strength of the English team has no relation to the number of EQPs in the Premiership is just lacking in logic.