The system is slow. There isn't enough modem time, and the modems don't run at full speed because the system is too slow. The freenet is often criticized as being isolationist --- one frequently must login to the NCF in order to do many things, no matter how much power one has on the desk.
Finally, the password file is going to explode at any moment. And even if a solution is found, user ids are limited to 16 bits, or 64k users. At projected rates of growth, the system will run out of user ids within the year.