Cosmology of Buffy the Vampire Slayer

When the Slayer dies, the "magic" that empowers all Slayers goes forth and activates the next Slayer. Slayers are, apparently, born with the potential, but require this mystic effect to come into their full strength. The magic is not clever - when Buffy was killed by the Master in Season 1, the magic went off and jumpstarted another Slayer (Kendra), even though CPR subsequently saved Buffy. Later, Kendra was slain by Drusilla, leading the magic (despite there being two Slayers) to activate Faith (now in jail).

There are two possible rules that fit this scenario:

  1. Whenever any Slayer dies, another Slayer is activated, or
  2. Whenever the active (most recently activated) Slayer dies, another Slayer is activated.
The events of The Cheese Stands Alone certainly seem to indicate that the magic considers Buffy to be a Slayer. Applying this fact and Occam's Razor, it would certainly seem that the first rule is more correct. Which will remain to be proven, if Joss Whedon adds yet another Slayer next season.

All of which begs the question: Why aren't the Watchers out making more Slayers? Kill off Faith. Find the next Slayer. Kill. Resuscitate. Repeat. Perhaps there are a finite number of Slayer candidates?