If it generates traffic and fire safety issues and requires coordination with police, fire, and/or other municipal services to make it safe, then yeah, a permit makes sense as it covers all that. The other option is to tone it down. It's all fun and games until you or a loved one is dying in a fire or waiting for an ambulance that can't get to you

I mean, there were specific shows at a couple houses when I was a kid, but no one stopped there to block everyone for the whole thing because that's a dick move. If people are, then they definitely needed to enforce local traffic only and a permit to set all that up and organize it makes sense to me.

If it's like the places I grew up, people are driving through neighborhoods. They're not parking, but driving at basically a crawl (sometimes pausing to take pictures). If they enforced local traffic only (i.e. anyone who wanted to see it had to go on foot), that would solve the issue so long as the parking exists somewhere.

It sounds like people who live around there were taking ridiculous times to get in and out of their houses because of the traffic. This would also be a bad situation for emergency services such as ambulances and firetrucks, potentially.