We actually did that with CW Colts a few seasons back.
Of course, we weren't dispanded amongst the other teams afterwards as that would be pretty detrimental to the strong team atmosphere developed within the Colts.
However, we have to keep in mind that we have to fill up the existing teams before a new team can be created. I think we need 17-18 players in each team, with 15 being the minimum when you consider that a bunch of players will often be called up for internationals.
Once we get above 90 active players, though, we'll be forced into getting a 6th team. Not sure how many we have right now - something like 80-odd?
EDIT: Sorry, that was in response to DCC. To Goughy...
In the first round, we had tried to contact a player for some time without response. We brought this up to the CWBCC who declared he would not be considered active for the first round due to his inactivity - of course, the moment we signed up our first player, he was suddenly browsing the thread. Not sure we'd want an inactive player with the advantage of the experience of the waiting, but at the time it was frustrating to see that happen. Then, further to our disadvantage, another high quality batsman joined right afterwards. We only needed one batsman and are more than happy with Kerr as he's quality and has shown strong activity, but the frustration at the system is obviously there.
Come round two, we are now looking for seamers which, to be fair, there are an abundance of. However our first choice was declined as he was looking to wait for another one or (suggested by his communication) two teams and I am guessing whoever of those two teams says his name first will get him. We're now looking at another player and awaiting their response, although I'm uncertain now as I've seen posts of his in another club's thread which suggest that he has already been collected by them unofficially for either the 2nd or 3rd round of pickings. I'm hoping that's not the case, though.
The biggest downer in all of this is for the rookies who will sign up with sides knowing that they were not first choice for that side. I don't know how thick-skinned these lads are, but there's a sense of pride when you're the #1 choice for a side and you aren't contacted after what might end up being 2-3 other players who all declined. Is that really fair on the captain or the player involved? It's a first season and they're only here for that season and after that can go wherever they like based on their experience.
There's also the impression I get that some captains may be making promises to rookies in order for them to decline other opportunities and this is something that I am against. I know some players here were also against that very thing happening with regards to long term contracts (as in, the suggestion - admittedly by myself - that players could be contracted to play at least X amount of games in the season), as they would disrupt the seriousness of every game played by playing people out of form etc.
The latter is just an impression I have got from one of the rookies I have been in contact with and I'm unable to give names of clubs (and even if I had them, I'm not willing to declare such things publically), but I do hope that this isn't actually going on and that the impression I got is 100% incorrect. I can understand the explanation of how likely it is that a player may get a shot, but not any such promises. Of course, this would never happen if the "rejection" option was removed from the draft.