Shouldn't there be less Linux Distros and derivatives

Who decides?
Who will be powerful and ethical enough to be accepted as the one which distribution should be allowed and which not? Also what about super niche cases, where some projects are useful but only for a minority of users but a dedicated one?
Look at ToriOS. It’s a special case derivative that is useful but definitely not needed by most people. Eliminate that one, too?
What about opnSense? Definitely will never be used by any average user but it is known and very used within advanced user groups and by professionals.
What if you need a distribution with a minor change but none of the distributions deliver that to you? E. g. most of the major ones drop or will drop 32-bit support. What if you need exactly the major one, not some alternative but with 32-bit support? Then the first “decider” would probably tell you, you shouldn’t work on this distribution as you should just use one of those which are already there.

That said, your chain of causation doesn’t make much sense. Basically, your argumentation is the following:

  1. There are so many distribution derivatives.
  2. So some of them die.

Your conclusion:

  1. Let there be only a couple.
  2. Kill most of them right now.
  3. So now probably none of these few remaining will die.

Basically, you want to pull the plug on all these distributions, instead accepting only the death of a couple ones.
Btw. some of the distributions that don’t exist per sé anymore, are still there but after a fusion with another distribution, like MX Linux, or changed to a different project, perhaps with different goals.

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