If we assume that the time wasted writing multiple grants outweighs the benefits of stiffer competition (stimulating creativity or harder work?), there are several ways success rates could be increased: more total funding, smaller grants, limiting grants/researcher, or fewer researchers. One reason we have so many researchers is that overhead payments to universities exceed the marginal cost of doing more research. So they keep hiring more researchers, independent of teaching needs.

http://blog.lib.umn.edu/denis036/thisweekinevolution/2011/03/the_problem_of_pronatalist_pro.html