It would also mean that anyone on the M register would need the same CAA medical as a JAA IR (PPL/IR or CPL/IR) requires e.g. the same pointless JAA audiogram requirement even for a privately flying PPL.
Why would they?
Do not confuse the DfT's actions against aircraft of foreign registry, with what is required when a licence is validated by another country. The two are totally separate issues and my hypothetical solution above contains what are both, in effect, totally separate issues and solutions.