Maybe I'm seeing this from a Panhel POV, but the way I read that statement is more that the school or IFC can't say "we will only allow you to affiliate with a huge group like Sigma Chi" when the students hoping to found the new fraternity would rather go w/ Crows or another smaller group.
They're saying that the bigger nationals should not be able to bulldoze over a smaller one (with things like big presentations and pressure from alum groups) if the guys applying want the smaller one. "Unrestricted" is NOT the same thing as "unlimited."
I know this isn't news to you Tony, but your IFC prez is a dumbass.