Server Licensing has had a long and arduous journey through Squad's history, and overall has had a negative impact upon its community. It has given OWI the responsibility and power to regulate servers if they wish to be shown on the main server browser, a system that is uncommon for good reason among many other games.

As per OWI, the licensing system was created to "support players to easily find servers which:

Have a quality server with a dedicated administration team 

Host from reliable and powerful server hardware

Promote teamwork and communication in their community and/or clan

Provide a positive environment for new players to learn the game and play with more experienced players.

Use vanilla squad game mode rules so regular players know what to expect (will be important once modding is possible).

Are open to the public at all times (non-passworded)."

Several of these requirements can easily be automated by a program to check if a server fulfills them, such as sufficient hardware specs, and no passwords. The banning of modding on public servers stifles the modding community to only a select few mods, meaning that the general community rarely checks them out, and that has led to a low playerbase in that part of the community.

The rest of the requirements revolve around less recognizable aspects for a program to detect, such as a reliable admin team, rules and providing a positive environment for new players. These are pure politics, and as many seasoned players can attest, rarely does any server have an active admin team, have good levels of teamwork or create a good environment for new players, and frequently leave them to fend for themselves. Admins are typically absent, with only a couple servers that have consistent teams of admins prepared to deal with trolls and sabotage.

Furthermore, unless there is some unspoken "pay OWI to host" thing going on, there is no financial incentive for OWI to maintain the reoccurring costs associated with Server Licensing, which include, but are not limited to, salary of dedicated employees and web hosting.

Additionally, from a technical standpoint, removal of Server Licensing is so trivial, I've condensed it to the following operation: Remove the Server Browser Button, Change Text in Custom Servers Button to be "Server Browser". In dedicated server exe, return false in the first line of the server license check function.

From this perspective, one can see that the licensing system is outdated and useless for Squad, and its removal from the game would create a much better environment for new players and clans.

Not only would it be extremely easy as stated before to remove the licensing system, but it would free up more of OWI to work on the game and community,  because there would be less needed maintenance on the community.