There's a couple of things that spring to mind to try and dissaude this tactic.
The 1st is concentrating on how the players"bind" to each other whilst in single file. To be bound to another player, the upper arm and I think part of front/side shoulder needs to be in contact with another player. Quite often players simply have their hand on another player infront.. if so.. that player and everyone else behind is not boound.. the ball is out.. no offside for the opposition.. opposition players are free to come around and pilfer the ball.
Another idea relates to what consitutes as a ball still being in the ruck.
The ball doesn't have to under a body to be deemed "still in the ruck".. it can be at the base of the ruck, and in the case of the scrum, not particularly close to the 8's feet, but still part of the scrum (ruck).
So is there some sort of theroretical semi-circle, from one side of the ruck to the other side.. roughly incorporating the base area.. if so.. does a line of players protuding out the back really count as being "part" of the ruck..
From the naked eye.. I'd say no.. again, ball is deemed out, and possibly the players in the caterpillar could be deemed to be offside if they try to prevent opposition players from getting to the ball.
I have a feeling similar ideas, laws (interpretations) were used to dissaude teams from using the mobile version of the caterpillar, the "trucking and trailer" driving maul..