FF - I'm involved with the ATC (have been for 30 yrs now), and can confirm that with the removal of Crown immunity (which happened several years ago), no-one is ready to take an individual decision to approve anything which has the slightest risk. I am also a shooting supervisor and the air is full of the sound of dragging goalposts and covering of 6 o'clock positions in relation to anything that goes bang (or even 'phut'!!).
I'm not knocking the organisation; it's just that as UK society takes the (IMHO undesirable) step towards the US 'sue em and leggit' mentality, then the youngsters of today who yearn for challenge and adventure (which inevitably means an element of controlled and assessed risk) will have to undertake it for themselves as 'organised adventure' is too prone to adverse litigiousness for the organiser.
Sorry to hear about the Rally (but be aware that the decision was probably taken at a County / Region level - it may well be that another Region would be permitted to do a similar event).