The major sticking point is how are they going to support themselves? You can't expect Charles to continue to support such distant relations and they aren't that wealthy. Both the Kents and Gloucesters have had to sell stuff to get money in the past and to pay death duties - as unlike Charles their estates don't come free. Charles has indicated that he wants to reduce the size of the working family and doesn't even want his brothers' children doing royal duties so why would he want his mother's cousins children?
They aren't so wealthy - that's why I've proposed to give accommodation to them in return to do public engagements. And well, mother's cousin's child is not so distant, especially in this family. (My family's not royal, not even noble for the last 100 years, but even I have a good and relatively close relationship to my father's cousin's children. Furthermore, Lord Nicholas is Charles' godson and Lord Downpatrick was Lady Di's...) And don't forget: He doesn't give them privileges because he likes them so much but because he can delegate some of his duties to them (work <-> low rent/...?), I believe that's fair.
As to "he doesn't even want his brothers' children doing royal duties": I don't agree with that. Anne and Edward have disqualified their children for royal duties by not giving them the titles they were entitled to have. And as to Eugenie and Beatrice: In the past, female members of the Royal Family have never been required to do royal duties - it's always the eldest sons that are expected to do so (which would again hint at Earls of St Andrews and Ulster) . (Well-known exception here: Princess Alexandra who was asked by the Queen to do engagements as there was a lack of female members in the 60s.) Consequently, I don't believe that Charles had any influence whatsoever on the fact that most probably no offsprings of his siblings are going to be working members.
"Actually Prince Michael doesn't appear in the Court Circular on a regular basis because he doesn't so royal duties. When asked to represent the monarch he does appear - as does anyone else who represent the monarch. He asked and has been allowed to have a business that sees him do all sorts of things but he doesn't actually do royal duties."
Well, he's leading British delegations travelling abroad (esp. Eastern European countries), visiting schools, hospitals in the UK and abroad, welcoming foreign representatives on the Queen's behalf, visiting troops as colonel-in-chief of various bataillions, chairing dozens of commissions, organizations, attending state banquets ... I believe that comes close to doing royal duties, although, not "officially".
Why would you expect the great-grandchildren of one monarch to do royal duties when the grandchildren of later monarchs - Lord Linley, Sarah Chatto, Peter Philips and Zara Tindell - aren't expected to do so and yet their relationship to a monarch is the same as the Dukes of Kent and Gloucester etc?
Well, there is one significant difference between those you listed and p.e. Earl of St. Andrews, Earl of Ulster: the latter still have the surname Windsor and are male-line members of the Royal Family. Women (Princess Margaret, Princess Anne) cannot pass down any (royal) titles, so their children are excluded from public life anyway, although they may be genetically closer to the thrown. (But that doesn't count; if it counted, you wouldn't have Number 28, the Duke of Kent, still be an active royal representative.) Furthermore, Earl of St Andrews and Earl of Ulster, when succeeding, will continue to be at least Dukes of Blood Royal (as the Dukedoms are still passed down in the House of Windsor, the reigning house of the Commonwealth Realms), although not styled HRH. They will still take precedence before all other Dukes and certain Officers of State. So, although not having a special style distinguishing them from ordinary Dukes, they still keep royal privileges in official life. It is the title that involves carrying out official duties for the Crown, not the genetical relationship to the monarch (all working members of the royal family except the Princess Royal and The Earl of Wessex are Dukes.)
It is clear that the size of the working royal family is being reduced and frankly if you were to have a royal do something surely it would be better to have HRH Princess Beatrice of York over The Earl of Ulster who will in time be His Grace The Duke of Gloucester - no royal title for him.
I agree, an HRH as patron does have more prestige, no doubt. However, before having Mayor John Smith as a patron, organization X will prefer having His Grace, George Windsor, The Duke of Kent, Earl of St. Andrews, Baron Downpatrick. The Dukedom of Kent has always meant representing the monarch and I'd be really surprised if it wouldn't in the future. However, of course, my idea depends on the respective people being willing to take on royal duties, which is not self-evident. (may there be financial problems or something else.)
Well, you may be right that Charles wants to reduce the size of the working royal family, but as I've mentioned before, having Earl of St Andrews/Ulster doing royal duties wouldn't mean more royals in public service, they would simply replace their deceased parents. By the way, Charles/Camilla, William/Catherine, Harry/X, Edward/Sophie, is not really much.
Furthermore, I don't think that Charles wants to risk monarchy's popularity by minimizing royal engagements. The more often people can watch royals visit their local hospital or something, the more likely they will support the monarchy. With so few royals on duty, they'd hardly be able to visit foreign countries, receiving ambassadors, honoring dignitaries, supporting troops, visiting a kindergarden, and so on. The minor royals have always served the more senior ones well, leaving to them all the important stuff, instead opening the new museum of Somewhere-behind-the-seven-hills in the Queen's name. Charles would be very dumb not using this big advantage...
