I used to always hit all enemies with 2 chars when I had low gear (JZ) and I'm pretty sure most of people who dual log do it for bosses, and bosses have the best drops so.
I think Schthack had a mode where the game selects either randomly or in a defined order a player who is allowed to pick a rare, I'm not sure about it ?
Rule 2 is cool when there are different interesting drops. like Oran Ma4dmd (before I start, I ask my friends who wants what between v101 v502 c/ability lame ...)
Rule 3 favors hunters because they are close to enemies while Force are behind ... And most of the time, when a good item drops, it doesn't drop a second time in the same run.
Rule 4 doesn't work for big items, if you find a PGF with 3 players, you can't help all 3 of them getting one, it would take ages.