Threads like this really annoy me and seem based on ignorance and prejudice, not any factual arguments.
Lets break it down a bit - there are today approximately 30-35 Admirals/RM Generals in the Naval Service against a total manpower of roughly 32,500 regulars (Trained and untrained) and about 3000 reservists, 1500 RFA and 1000 civilians in NAVY Command. So roughly 38,000 people. That means that the total 2* and above contingent is a total of 0.1% of the entire Naval Service.
If you add in all the Captains, Commodores and Admirals together, then you have roughly 400 people - or approximately 1% of the Naval Service at the top 5 of 10 ranks in the Officer Corps. Thats not that many people.
In the RN the Admirals are split roughly 3 ways - you have about a third of them running 'Navy' Jobs - so Fleet commander & deputy, 2SL, NAVSEC, FOST, Ops/FOSM/FOSNNI (1 post for 3 hats) etc. That means roughly 10 Admirals look after the Naval Service of 38,000 people.
You then have another 10 or so in so-called purple appointments, that are rotational and filled by all three services - for instance Main Building posts, JFC posts (next CJO will be an RN 3*), or procurement roles.
Finally you have the NATO / exchange / Other posts which fill the balance - for example we provide senior military personnel in Naples (or did) or the old CINCLANT deputy job.
There are several things to note -firstly, a lot of posts are subtly downgraded -25 years ago the RN had 4 x 4* in its regular scheme (1SL, FLEET, 2SL, CINCVAHOME), plus rotational 4* posts in the HQs and elsewhere. Today it has 1 permanent 4* (1SL) and the VCDS post. Many posts are downgraded from 3*-2* or 1*-OF5 (for instance Captains now command shore schools that used to be run by Cdres).
The second point is that these posts exist because the military is a hierachy and needs people to command. If you start downsizing too much, you both squash the promotion ladder (e.g. make all Capts - Commander jobs) and delay promotion, leading to good people leaving, or you need to do what other countries do and create an interim SO1 rank (many European Navies have a 'senior Commander' post with 3.5 stripes).
You need to offer a credible career to keep people in, you need line management chain hierachies for reporting purposes, and you need someone senior enough to actually run things. What this does mean is that most 1* and above are seriously busy people. Many of them have 2 or 3 'caps' to wear that involves their time and effort and means their days are long (most Admirals I've met are in very early, home very late and working solidly 5 days a week with work on the weekend a regular issue too). Its not an easy life of gin and uckers.
Secondly the supposed 'benefits' that some people think they get don't exist. Most Cdres get an MA or PS at best, and no car/driver/residence. A tiny number of these posts attract a retinue (I think from memory it is 1SL, FLEET Cdr and possibly one or two others) mainly because the sheer amount of travel and hosting required means its better to have a professional do it and keep the show on the road. This is backed up by a Flag Lt and an MA at 2* level (but again no driver for the most part). I know friends in the commercial sector who are genuinely shocked at the paucity of perks for our most senior people, and how hard they are worked in return.
Finally, there is a real problem of what posts do you want to stop being Admiral posts and why? To downgrade a post means all manner of implications, some legal, some reputational, some making it harder to get access in future for engagement purposes etc. Every time this post comes up and I ask "Which specific 2* and above posts do you want to downgrade and why" the answer is always to the effect of "Dont know, but we have too many".
I would argue that we actually probably have too few 2* and above. This means their workload is too great, their ability to focus on deep issues and lead on them and take a decision is reduced, and if they are away on travel, then it can take a long time to get things done. I would personally suggest the RN would benefit from over time adding a couple more 2* posts, primarily to ease the burden and allow better leadership. Cutting for the sake of form does not always make a better organisation.