For the most part the people setting nets in the diversion and the wairau lagoons are breaking no laws. The set net ban to protect the dolphins ends at the river mouths. I feel its a disgusting thing to do but there is not much which can be done.
No person may use or possess a line with more than 25 hooks. Possession and use of Long Lines are prohibited in Pelorus Sound inside a line from Tawero Point to Opani-Aputa Point and in Kenepuru Sound.
A more comprehensive list of fishing regulations can be found here.
With regards to Kontiki fishing, I have found that the best fishing is normally just behind the first breaker. Casting further out is often less productive. Once the basics have been figured out its normally not hard to catch a feed, or even multiple feeds per trip so I do not see the point of setting a long line off the east coast beaches.
In saying that, it would be interesting to see if the mutiple hooks could result in the capture of a rarer species.