Your assumption is correct. The alicorn transformation can only be granted to ponies.

I'm not sure what you mean by the danger, in point 2. I can't think of a danger that fits all the criteria you mentioned. Military threat wouldn't affect other ponies, and envy would affect other races regardless of alicorn rule or not.

Point 4 is good, though it has a fairly easy answer: Ponies would have to be approved by someone (or multiple someones) trustworthy in order to be upraised, not merely by any alicorn. So, you would need to trust the pony to adhere to the laws, but you wouldn't need to trust them to have excellent judgement of their friends and their friends' friends and so forth. I think it's pretty obvious that there are far more of the former than the latter.