Maybe they should have single day "test certs" for which you can issue an unlimited number on a given day for a given domain. Not even completely sure this would work but it might be convenient to have even with the limit increase.

I'd prefer they open sourced and allowed you to run the service (self-signed) locally.

They do! boulder[1], the server software behind Let's Encrypt, is open source.

[1]: https://github.com/letsencrypt/boulder