Peter,
I don't think G-Reg is any better than N-Reg, I think that both have issues, a few minutes before I saw your post I posted on the Indy Hiatt thread:
I think a good example of stretched resources is the CAA oversight of maintenance. Looking at the prosecution statistics that they publish how many cases have been brought to Court by the CAA with regards maintenance issues? Is that because the maintenance is of such an incredibly high standard that they never need to take enforcement action, or because they do not have the resources in the engineering system to actually bring an action to Court?
I do think the FAA maintenance system is more open to abuse in Europe - simply because of the lack of FSDO's in Europe to police N reg maintenance