2D
I agree that the bottom end of the GA market is going N primarily for what you call FCL (the FAA IR) reasons, but I don't think that's anywhere as true higher up.
There are turboprops and bizjets which are on N for serious (and in some cases insormountable) certification reasons. I met a man recently with a bizjet (not a cheap one like a Citation) who reckoned it would cost him £600k to move it to G. Nobody would even consider putting that plane on G. Yet, it doesn't have any equipment that would be considered unusual for the type. He has an FAA CPL/IR, and a UK ATPL. JAA IRs/ATPLs are exceedingly rare at the bottom (SEP) end of GA (I gather you've got one) but not so rare higher up.
I know all this stuff has been done to death here, in which case one could ask why does anyone spend the time to write anything here. I am just making the point that it's a complex picture. Most people reading this think that the problem consists mostly of the little N-reg planes sitting on the grass at the local airfield(s).
Equally there are a lot of heads in the sand. This part of Pprune is largely dealing with the very low end of GA, and I suspect VERY few people involved with bizjets ever read the "bizjet" sections. I know that people that fly seriously just don't have the time to read these forums.
But these people, many of them very influential, are going to start waking up now.... I don't think there is going to be a shortage of material for educating the DfT
F3G
A Govt is allowed to govern but the rules should be reasonable. If people do something to get around rules that ARE unreasonable that is no suprise. It isn't as if people were going N primarily to save money.