Well, I think that there is a logical limit on how many caches will be placed. And I don't see much of a litter issue.
For example, one of the caches I found is in a State Conservation area here (Ruth and Paul Henning). It's not far off a trail that runs through the park. I think this park is about 1500 acres. The people that use the sites that list these caches would not likely encourage more caches in this park. There's just little or no reason for it. The same would apply almost anywhere, it would seem to be a self policing sport.
The issue of "Sensitive Areas" came up in my conversation with the Conservation dept. My first question about that was, "Has that actually happened yet?" The answer was "No". I conceded that a cache could be placed in a sensitive area, and pointed out again that I think the sport would be aware of newbies doing that and respond accordingly, but I also pointed out that traffic to any one cache or location was still very minimal, so it was not a problem begging for a solution at that point. In the years since I have not become aware of this being a problem, but again, I am not active in the sport.
I do like the idea of a "virtual cache". It could even be set up with a virtual "Earthling Doodad box". After you've confirmed your being at the location you get to "Leave" an item, then pick from a list of items that others visitor's have "Left There", and they could mail you the item they've listed. That might draw some sponsorships too
I think the sport adds an interesting incentive for those that want to get outdoors. And it certainly provides a fun way to learn to use the tools hiker's use. The number of those that progress onto overnight stays and off trail hikes will really only benefit us all, even the gov agencies that manage our public land.
Finding something is a big part of the fun of getting out. But like phat said, there are places I've been that I would never post on a website. You have to find them on your own, or know me pretty darn good