Each has its own merits in the context of sports competitiveness, but in Twitter's case there is no reason for a hard cap at all. What does Twitter gain by putting a hard limit on API usage?
There is a reason for a hard cap: the limit's goal is to ensure twitter-owned clients dominate the market for basic twitter use.
You may have a point by saying that twitter can simply make the tax per additional tweet equal to the approximate revenue they plan to lose as a result. But that figure may be hard to calculate, especially its long-term value. So even if a company is willing to pay 5x to twitter per additional tweet over the hard limit, twitter doesn't know the long-term impact of it