Didn't even know Flist has a cap >.<; Yes more is better.
I've always just converted to a guild if I found that I had more than a certain number of friends roaming around. O.o
It'd maybe be nice, later on. I'd rather they work on more important matters before this though. Then again, with most people being anti-social anyway I imagine 40 friends is an adequate amount.
1. The friends list should have less than 10 people on it. That way GMs in GvGs can cap their friends list with fewer guild alts and level 1 characters. It's tedious to manage 40 dummy friend characters so enemy guilds can't /friend you.
2. Alternatively, remove the automatic acceptance of /friending someone. A /friend action should be an invitation, rather than an automatic link. The target player should have to accept the friend invite before they appear on your friends list.
Yet one more way that shows how much this game was not designed with PvP in mind.