I think the decision to have 4 foreign players in the squad is the perfect decision. Because the main goal of BCCI is to find talented young players. And after every IPL we can see BCCI has got a lot of young talented players. As a result, the idian squad is always strong. I agree with you, older players should be avoided. And young players should be given more opportunities. Because the youngsters will lead the next Indian team.
I would personally go for a 5 player per team limit for foreign players. It would mean that low quality players such as Kedar Jadhav, Piyush Chawla and Dinesh Karthik are weeded out from the playing XI. Right now the limitation of 4 overseas players is only benefiting these oldies and not any younger player. Also, there are plans to increase the number of teams from the current 8 to either 9 or 10, and that should give room for fringe players.
IPL is really created to find the young talents in India and we also have to accept that it changed the cricket era to the next level after the introduction of IPL but now IPL is now turning into more business than sports so we may see the increase in the overseas player limit but I don't think there will be an increase in the teams because they tried it in the past but it didn't worked.