And why does BTCC work? Customer cars.
F1 has always been artificial, the whole concept of a "Formula" regulation set is a constructed set of regulations, or 'formula', that defines a non standard race series that doesn't exist as a natural progression of any normal cars. So then making some artificial rules to solve the problem isn't really an issue in a series thats entirely artificial from the ground up anyway.
I've mentioned my proposed solution many times before. Customer chassis' available in a single spec from each manufacturer, customer engines available in a single spec from each manufacturer, and a Teams championship rather than a Constructors one. A team buys a chassis, an engine, bolts them together, puts a couple of drivers in them, and competes. LMP2 is basically becoming this, so I'm watching that with keen interest...
You would have to wrap it up in a number of rules and regulations to ensure clarity and a level(ish) playing field, and avoid the RBR engine style issue, but from a racing spectacle perspective, things would certainly be more exciting if the grid was made up of 8 Mercedes, 8 Ferraris and 8 Red Bulls with a decent engine in the back, rather than 2 Mercedes, 2 Ferrari's and 20 other people who shouldn't really bother to turn up.
F1 is artificial, always has been. So lets make the artificial-ness work for it rather than against it.