It is regenerative. If you increase the gain of RF amplifier, you have to decrease the detector's gain to prevent oscillation. I am not sure, but I think you will be at the same place if you want to increase the detector's input voltage.
And I don't understand this isolation role of the C. In the crystal there is a series LC, which isolates DC between RF preamp and detector. I thought that cap is just a voltage divider with the MV209, and actually it is needed to decrease the AC level at the output of the RF preamp, so I mean after the RF amplifier you have to attenuate the signal not gain it.