*face-to-floor* Er... somebody hasn't quite been paying attention to WHY Dark Armed Return is so 3vil. It had a whopping four cards that could bring back all of its giant RFG monsters, three-plus cards that could bring back one monster, and six draw cards, along with a giant scarecrow beatstick. Because that's what Dark Armed is- a scarecrow to keep your opponent from attacking your monsters in fear that you'll get the magical three and summon Dark Armed next turn, even though the odds are that you didn't draw it. Limiting the Dragon to one probably won't change that too much, and besides, it's been proved that even with Dark Armed Dragon the deck is still pretty dang powerful. Dark Armed Return is all about the massive draw power and the ability to remove your monsters from play in order to set up for a massive return. Now they've just lost all but one of their mass-summoning cards, and that one card remaining can be countered simply by chaining Waboku and requires quite an LP cost, and is only good for one turn. I think the current changes are just what was needed to take Dark Armed Dragon and change it from a horrendously broken deck to a powerful but not almighty deck. Plus, if we banned DAD now we'd be basically throwing it in the face of the players who've paid so much to get their hands on one. Much as I hate an overly-centralized metagame, I don't want to trample the heads of people who were willing to spend so much cash on a children's card game to get rid of it. Which is probably what Konami was thinking. Besides, getting rid of Dimension Fusion also screws over Shadowpriestess OTK and similar fusion-loop decks, which are also crazy-fast and are only slightly less popular than the Dark Dragon.
As for Judgment Dragon, well... limiting it to one just means that you'll sack into it a little less often. It won't really slow down the crazy-fast tempo that Lightsworn can deliver. The other Lightsworn are pretty dang powerful on their own, and Judgment Dragon just makes them CRAZY powerful. Just pack a few copies of Monster Reincarnation, and you can snap up Judgment Dragon even after you've sent it to the graveyard. But yeah, agreeing with Frosty: now that Macro Cosmos is viable again, Lightsworn is going to have a major pain in the neck.
And as for your comments on Monarchs, NiGHTS... well, as of right now NOBODY who has run them has made top two, simply because Monarch can't keep up with the crazy tempo created by Allure of Darkness and Shadowpriestess OTK-crazy-draw-decks. I actually look forward to their return to the game. But honestly, why does everyone equate "competitive" with "Monarch"? These days "Gladiator Beast" would probably be a better symbol. Anyone besides me scared to death of what they can do now that they've got Gyzarus?