Adrian,
A couple of observations from one currently starting a build, and therefore perhaps less qualified to give opinions than most if not all here

. So feel free to shoot me down in flames, or tar and feather me at the next event I attend!
1. I thought there was already a defined set of guidelines to what a cyclekart was, (listed on the first page of the forum), that notes the allowable modifications to the standard engines as carb, air filter and governor removal (and maybe a billet flywheel?). Surely if other modifications are made, any times set, or races won would not be valid, or are you saying that these modifications alone take the motor to 10hp? - If so, perhaps the only way to really get a grip on power is to adopt the French attitude of stock motor, no modifications.
2. Looking at Grahams machine I suspect it has a considerable weight advantage which will aid acceleration, there doesn't look to be a lot of excess material anywhere, and what weight it has is very low down. Is that what is giving the performance advantage?
3 if you were to put an mph limit on, how would you police it? I seem to recall we have speed limits on our roads, and that works well!
There seems no easy way to control top speed other than limiting engine mods, (and thus power), and I thought that was already done.
I suspect the issues of braking, and instability, are the consequences of starting to venture out onto bigger tracks/venues. Running on go kart circuits probably hasn't allowed the cyclekarts to stretch their legs properly, and show up weaknesses.
So as a bit of an outsider it seems to me that there are 3 options that are available, given that I don't believe you can police speed.
a. Restrict engines to stock unmodified.
b. Restrict running to go kart tracks, where there isn't room to get much speed up.
c Embrace the new found freedom and speed, and work to improve handling and braking.
Maybe it's also time for a gentle look at scrutineering with new karts starting to appear? Those who know, and have some experience, could perhaps cast an eye over newly built entries to suggest potential issues, as a 'newbie' like me doesn't know what good or bad looks and drives like.
Can you let me know what you decide as I've got a Loncin on the bench and I need to know if I can rip the governor out or not in the near future

PS the most important part of your post for me was this.
"seven of us sat around the dinner table enjoying dinner (and a pint or two) talking about what a good day we had had both as individuals and as a group."
Peter