Fair point; however the system you refer to costs about £10,000 to install, so few UK GA pilots will go for it.
Also there are very few GA-GA mid-airs, zero in IMC I believe (in the UK, so far), so the case for this is not strong. The traditional viewpoint in traditional UK GA is that you are supposed to keep a lookout (what the traditionalists call the "Mk 1 eyeball") in VMC, and those who are concerned about a mid-air in IMC can fly around in the knowledge that they are far more likely to hit a hill, so actually they would be better off spending similar money on GPWS.
Debating this, one just goes round and round. One could make a case for mandatory Mode C in the vicinity of busy controlled airspace (as they have in the USA), for reasons of traffic separation, i.e. to get a better grip on the numerous and rising CAS infringements. But at the same time PPLs are taught the same old dead reckoning navigation techniques and absolutely nobody (who is in a position to change anything) wants to do anything about that, so infringements will continue, regardless of what transponder equipment planes are carrying. If I was in charge of reducing infringements, I would first tear all my hair out, and then make Mode C mandatory around CAS, US-style.
Unfortunately the last thing Europe is going to do is what America does, on the principle that Europe always does it better....