The way I see it is that the introduction of Mode S is designed to "protect" CAT from GA aircraft while they are in the Class G (the airliners that is)......Nothing wrong with that, collisions do happen as we have seen recently with the Glider and the Hawker in the USA.
There are several ways it appears this can be done:
a) Either madate that all aircraft are transponder equipped, so CAT can see them on their TCAS and be responsible for their own safety
b) Increase the size of CAS so that the CAT aircraft have climbed to a safe level before leaving CAS or entering enroute CAS
A far simpler and cheaper option IMO, which would not force transponders on aircraft that can't have them would be to introduce Mode C vales, like the US has. So if you want to operate within 30nm (or whatever) of an airport while remaining outside their CAS you must have mode C fitted and be transponding. If you want to enter their CAS, you will require Mode C and an ATC clearance, and to enter airways Mode S.
This way VFR bimblers in simple machines can remain outside of these areas, and go about their business not transponding or communicating. Training aircraft and people who enjoy the freedom of flying on long cross countries would require Mode C as a minimum, as many already have. Funkier machines or people who use their aircraft as a form of transport under VFR and IFR in the airways would realistically require Mode S.
I will always fly with a transponder, it is a personal choice, though do object to being forced to spend 000's of pounds on a piece of kit to replace my perfectly serviceable mode C transponder.