It is easier if you can go to the actual issuing body in person. It is because you are doing the application by post that creates the ID verification process more onerous. In the case of the passport, you either go to the DFAT office or Australia Post who do the verification on the spot. If you could find an ASIC issuing body locally then the process would be very similar. That is, take your application and ID docs along, they check them, take your photo and money and done. Exactly like the passport process.
As for the cost and validity of the ASIC vs Passport, I agree that it does seem out of whack. The difference is, a passport can be issued to just about anyone whereas an ASIC does involve quite a detailed criminal history check both with the feds and state based cops and under the current legislation, that check has to be carried out every two years.
Looks like the Minister's appetite to vary the ASIC requirements for smaller airports and GA has been knocked on the head.
Maybe the new minister for aviation the Richard Smith will change things when he gets elected.