I think that an ideal race league would use WRC-inspired homologation rules and little else (except for some safety features)
Any chassis size. Whatever aero you want. Any engine size/configuration. The only constraint is that it needs to be something you can put into production.
we’d get to see a Cambrian explosion of weird race car variants that would make race day strategizing wild. and we’d really get to showcase cool creative engineering. And we’d eventually see the benefits of that engineering trickle down into normal production cars we all drive
I favor little regulation and tight cost caps. Example: you get 100 millions, 100 kg of this kind of gasoline per race, do whatever you want.
Any chassis size is probably not a good idea because cars collide with each other and they must do it safely. So maybe rules should define a box that cars must fit into, with the parts that get in touch with other cars at given places and with given shapes. Example: we don't want spear like nose cones at the same height of the heads of drivers of other cars. No halo can protect against that.
The problem with little regulation is that manufactures will be frightened to enter because it's easy to have a championship in which the one with the bright idea wins all the races and the other ones are scattered 2, 5, 6, 7 seconds behind.
We had something like that with the CanAm https://en.wikipedia.org/wiki/Can-Am
A lot of innovation and crazy designs.
It's been done. Look up the Can-Am series. At best, it would last a couple of years until the cars got way too fast for the tracks, and the manufacturers were no longer prepared to invest in it because there was no commercial return in it for them.
The idea that there is any significant relationship between what makes a good production car, even a sports car, and a racing car was always dubious and today is frankly nonsensical.
The way to make a car fast round a race track basically comes down to the amount of downforce it can produce, and the power of the engine. Downforce is almost completely irrelevant to road driving, as taking corners fast enough to generate cornering forces of over 1G is frankly suicidal on the road.
As for engines, aside from the fact that the internal combustion engine is doomed in road transport (despite what the current administration thinks), producing an engine with performance that exceeds what even good drivers are capable of handling without electronics doing the job for them was solved at least 20 years ago, and continues to be a solved problem despite tightening of emissions standards.
In any case, while lighter, smaller, lower cars remain the preferred option for motorsport applications, all anyhbody wants to actually buy, particularly in the United States, is gargantuan SUVs and pickup trucks, which makes any application of motorsport technology for the road moot.