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You earn more squad points by leveling your squad leader and squad member ribbons thus allowing you to make larger squads.
But yeah I think right now it's only if you make a squad with friends, but thats the whole point of squads anyway.
...
I dont have Friends ;_;
Taking myself as an example, on many occasions I found myself in squads with someone typing on a Cyrillic keyboard, someone who just ran off and did whatever they like and ignored what the others were doing and me, trying to follow (or be) the squad leader. This system isn't working. I can see what they were intending, but they chose the wrong audience for it in Unbalanced Staged Battles... I can see it working in War, but not with a bunch of completely randomly matched players who don't really care about it.