I think the key to this problem is not limits to price, limited parcel size, or unlimited compensation. I think the key to this problem is a clear definition of what will not be tolerated in the TOS. I think the biggest problem lies in coming up with a fair impartial policy that will limit land extortion while not limiting people on what they can do with their land. These are some starter ideas I've been playing with for a future proposal in the voting system.
1. I think one sign per message should be allowed for every 32 meters for each individual owner. Multiple signs owned by multiple people with the same message should only be limited to within 32 meters of each other if the signs in question are using a clearly similar texture to the other signs in the area repeating the same message. This should include for sale signs. I've been guilty of this myself, but I'm trying to correct the problem. There is no need for 10 for sale signs in a small area even if there are 10 parcels in the 1024 meter^2 area.
2. I think that having prims cross over boundary lines should be considered abuse. It has been used to annoy neighbors by rotating prims that enter their buildings. I realize that coding property lines to keep prims from crossing them might be dificult, but a statement in TOS restricting this practice could at least allow for more action when the abuse is carried out.
3. I think that repetitive sounds not relating to the surroundings or the prims containing them should not be allowed. This may be an exploit to come. There was a request in the scripter's forums recently from a land extortionist many are talking about, asking if anyone had a distinct clicking sound. I understand if the sound relates to the area or object it is placed in, but if it is a repetitive sound that does not relate to the area or object, it should be considered an abusive sound used for the intent of causing annoyance to the neighbors.
This is the beginning of my ideas. I've gotten complaints myself for my land sale signs that I just recently started using. I am currently working on something similar to Toneless Tomba's innovative natural sign. Not a copy, but hopefully it will look just as nice. I also am trying to replace some of my signs that contain record keeping scripts with invisble prims when there are many plots close together. I would be eager to hear any other suggestions people might have for how I can make myself less of a nuisance (as long as it is constructive), and perhaps other ideas of what types of lines Linden Labs should draw against those that are purposely making a nuisance of themselves.