Even hypothetically Five of each Princess on staff at a time in two sets for the day and the rest of.MK meet and greet staffing for the day is less entertainment staffing when you compare it to all the staffing of what Tokyo Disneyland provides.
Things you're skipping...
1) A M&G Factory runs from open to close - unlike all roaming characters. Roaming characters have peak periods and then will thin out after dark or during other things like fireworks, parades, etc.
2) A M&G Factory is indoors allowing longer shifts per performer - outdoor characters typically work 20min shifts... indoor work 45min. That means less time spent in turnover - aka downtime where no guests are being seen. It also means the # of guests each performer sees will be higher.
3) A M&G factory with multiple rooms allows performer changeovers out of sight - so they are much shorter. So again, less downtime.
So in your hypothetical 'five of each princess on staff' - they would ALWAYS meet less guests than 5 princesses in a M&G factory in the same day because they work less and there is more downtime.
"Factory" is the best way to describe it - the character halls like Town Hall, Innovations, are there to pump the volume of people that can meet guests so wdw management can hit their imaginary guest goals of all the things they 'must do' on a trip and do so in a predictable manner. Then WDW has all its 'fixed location' M&Gs that are an inbetween of the benefits.
WDW is building for scale... and isn't addressing your desire for diversity or adlib. But that doesn't negate that by sheer volume of characters working.
Additionally, WDW is heavily invested in character meals - remembering there are TWELVE dining locations across property - to just 3 at DLR total.
If I were trying to paint an evil empire picture... I'd probably point at buoying the value of character dining than I'd be pointing at photopass/genie+ desires.