I think part of F1's fascination is the technology so I don't think single engine is a good thing. In the 70s and 80s they introduced turbo engines, active suspension, 6 wheeler, automatic gearboxes, carbon fiber and other stuff. They did all this without being as expensive as it is now. I don't know where all the money goes but I think F1 should be about crazy technology. They have to find a way to let designers be creative while still keeping cost in check.
I think the middle ground there is not "one engine for everybody" but probably "one set of rules for a long time". The money game is really worst with this set of ever changing regulations, which favors large development budgets for rapid adoption. If regulations stay the same for 10-15 years, there can be learning and progress and technological competition even for the smaller teams.
I think the cars are too reliable now. The cars used to blow up all the time but now this rarely happens anymore. I think there is a lot cost involved in making an engine super reliable.
