Allowing custom variations in tournaments would be awesome in a utopia where balancing this is possible. But balance is crucial to the health of the game, and even a single completely broken and nigh unbeatable ability set would wreck MK11's launch momentum. IIRC, there was a Raiden variation in the early days of MKX that gave Quan Chi zero options to stop corner pressure other than a combo breaker. Raiden just needed to get Quan to a corner and then it was game over through block chip damage.
It’s hard enough for NRS, or any developer for that matter, to avoid those sorts of broken matchups if they need to check that every character has a variation that doesn’t automatically lose to any other variation available to any other character. Allowing custom abilities means they would have to confirm no auto-lose conditions against thousands of possibilities per character.
And even if NRS successfully prevents auto-lose/win conditions, the possibility that matchups are lopsided increases, as does the severity of that lopsided-ness. At which the point counterpicks could far outweigh player skill, and then the game turns into counter-picking poker. And I don’t want to watch poker tournaments. I want to watch matches where I don’t know which player/character will win because the balance is tight enough that counterpicks don’t create a foregone conclusion.