I think altitude reporting transponders are a good thing near busy CAS, the safety benefits are undeniable. Whether they need to be A/C or S possibly boils down to how many of them are going to be up and about at the same time. I believe there are technical reasons that make Mode S better if there are going to be a lot of transponders up and on at the same time. So if the regulator wants to mandate transponder carraige it's probably not surprising they've chosen S over A/C.
I think the above is exactly right.
I think a big mistake over here was to not make Mode C mandatory near busy places years ago, US-style. That would have defused a lot of the current issue and may have avoided Mode S altogether.
However, Mode S is a pan-European thing so perhaps debating the UK scene is a bit pointless. It all comes down to how many axes were being ground under what table in what Brussels committee.