DFC
"can leave a hole open for the unscrupulous pilot"
Did you draft the DfT consultation document by any chance?
Basically, it said "we have no evidence of any problems, we have no evidence of any loss of safety, we see a theoretical problem due to the lower oversight, so we propose to ban it just in case this became a problem". A really good way to form govt policy...
There are far far more poorly maintained planes on G than there are on N. Just pop along to your local flying school for a pleasure flight (called a "trial lesson" due to another quirk in the regs, or a "loophole" if somebody wants to grind an axe) and see what piece of wreckage, maintained by a JAR145 company of course, you go up in.
If I was based on a farm strip, and flying between farm strips (i.e. generally avoiding plane spotters) I could fly a completely fictitious G-reg (the number obviously identical to a real one, in case anyone checks it on G-INFO), running on petrol out of the farm tank, and with oil changes every year. Oversight??? People don't do this because they value their life.
The oversight argument doesn't wash at all.