At a point, over saturation is definitely bad. Say I host a tournament on the southern end of a state and you host one near the middle on the north side of the state across my border. You and I can work together on scheduling and supporting each others tournament series, or I can work with the other six TOs in my own state, which leads to me hosting tournaments uncomfortably close to yours in date and location, even if I'm not trying to steal your thunder. It ends up hurting us both. I don't get much OoS representation at my event because I'm competing with you, but I also end up the smallest of my own state's tournament because I'm on the southern edge of the state, so I can't ever get enough of a draw to reach into your state and make them want to come. Meanwhile, my state has 7 ****ing TOs and a tournament at least once a month. You have a really hard time pulling attendance from my state because, since we're doing it right, we incentivise our players, low through top level, to support our scene.
Oversaturation leads to problems and stubborn people don't make sacrifices. A LOT of people host tournaments because they're stubborn enough to do it. They make a comment or see something they want to accomplish and they host their own tournament to make sure it's "done right." Those people don't stop hosting tournaments.
The trick is to space tournaments out so that there is something that your region can go to every month. That gets trickier and trickier as you expand (see half of Alabama into all of Alabama into AL/GA). You can't do that when a TO stubbornly hosts monthlies, even if he schedules around your tournament season, because he significantly lowers the pool of traveling players from his immediate area and outward due to the fact that they have an alternative now. This causes your other events to be smaller and have less allure when trying to sweet talk other new areas into coming to your events.
But that's a tangent.
I'm divided on getting a stickied topic in Metagame and Rule Set or something similar. Even if you coat it in warnings that new players should not be attempting to start tournament series, you'll get one month into the scene Random Ike Guy trying to host tournaments and spending his money on a venue (which is something that I would advise) without the ability to get it back (something I would also cover) because he thought he had a gauge on the community and he did not.
That and that I am extremely opinionated and a lot of the reason I go out of my way to make sure tournaments that have my name attached to them are amazing is to push my message. I am pro-ban and it shows. I am pro a lot of things that are not popular and it shows. However, in such a format, that advice could easily lead to division instead of unification because two people from the same region both read it and both try to apply it and they are in bitter disagreement on the way that the tournaments should be run.
Excuse me if I rambled a bit. I didn't reread this.