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I'm pretty sure that the original text about abilities over 5 was from Laws of the Night, where there was also some other text that specified that better-than-8th-generation vampires could have abilities of 6+. (And also Backgrounds and Influences? I think?)
I agree with Marc's comment about arms races. I mean, don't get me wrong, I've got the XP to burn, and as Alexander I'd love to raise all my combat retests from 5 to 10, or whatever, but I'm not convinced the game would benefit from raising the cap.
So in tabletop White Wolf, it's pretty easy to be a superhero who bullets bounce off of. Invest enough in your soak pool, and you can become more or less immune to small arms fire for a scene, and you can spend a hundred rounds trading swings with stuff, and so long as it doesn't do agg, you'll heal whatever damage manages to get through your soak. (Alternatively, you'll take one here and there and find a way to heal that mid-fight too.)
In MET this is much harder. Taking a lot of actions costs you traits and retests and wears you down. This means that all contests are heavily weighted in favor of whoever brought more characters, and makes it harder for the lots-of-XP-sheets to overshadow newer characters for an entire game's worth of play. And in a larp with a lot of players, I think this is good. It means that there's a mechanic that subtly encourages the spreading-around of screen time and who gets to have awesome moments where their character succeeds at such.
As it is, the 5-cap rule *already* lets people build PCs that have more retests than they can use in one session, even a session of heavy combat.
Also, yeah, this pretty much just is about combat, because almost never is there anything but combat that burns through 5+ levels of any one ability in a single game session. I mean it can happen *sometimes*, especially if you're engaging in a mass-social-challenge of "my story was awesome" at a moot, that's a good way to burn through 5x Performance in one round. But generally this is about combat.
Mind's Eye Theater sucks,
Conor