Allowing squadrons to have members from multiple regions will cause problems. The normal match-making system will only allow adjacent regions to fight (Based on feedback saying that USWEST to EUWEST has bad latency... especially for people in Australia (you guys will matchmake with USWest until your number grow)). If players are separated by too much distance the quality of the games will suffer. This will be especially noticeable in squadrons matches. Restricting squadrons to only contains players from a single region will allow me to ensure a reasonable level of latency in all matches.
However, I don't know how big of an issue this is. If those interested in squadrons really want no restrictions, then that is what you'll get. But keep in mind that there will be problems caused by this. I may have to kick players from squadrons matches if there latency is too high, or make matches with too much latency 'unofficial' and not affect the ladder.