The rule against pegging out an area is thanks to that guy pegging out half a soccer field for himself and his Landrover, and the other half for his mate that comes tomorrow with a jeep...
People will complain if other people do that, people will complain if they're not allowed to do it. Sometimes you just can't win as organizer. Overall I'm glad this rule is there, although I understand you are negatively surprised to see some people still manage to start early.
I'm happy they still allow people to sell some bits & bobs from their pitch, it makes walking around that much more fun and in the past I found some great gear for friendly prices there. I also understand they will step in when you have a complete market pitch and don't pay the rate real stallholders pay.
As for the dust being kicked up, that's not the organizer's fault and there isn't much he can do about it... or does anyone really expect a marshall is posted every 50 meters or so with a laser gun? I guess a few signs reminding drivers of the dust they kick up will be far more effective.