I think it's essentially that if you try to preserve everyone in Living Memory, each possessed of a soul from the aetherial sea, then eventually there will be no souls remaining for the actual living and everyone will merely be in Living Memory. But worse, this was headed to come at the expense of the souls of other shards.

Ultima Thule differs because they aren't being endlessly created. Those that exist now, exist. They may have off-spring, but there is no guarantee that their parents can't pass on. The Omicron are also unlikely to have more of themselves created. It's limited overall by the supply of Dynamis there, which isn't infinite, so something would eventually give. Which is probably why when you finish the tribal quests, it's not as complete as you'd perhaps want.