Why do you think it needs to be kept?
Emergencies, trials and getting youngsters some experience. Some changes to make.....no loans to clubs in the same division, no fees for loans, 3 month maximum, maximum of 3 in and 5 out per season.
Emergencies I'm afraid tough, if you get relegated you get relegated. If you have injuries use your own youngsters and let them get some experience at the club that owns them.
Imagine how much more competitive the leagues would be if these 38 Chelsea players and all the other PL clubs loanees were actually at competing clubs permanently.
Restric the squad sizes and no January transfer window.
If Man Utd have 3 injured GKs during the season then if they have to play an outfield player in goal for parts of the season then so be it.
The current system just protects the status quo. Needs a good shake.