"Screw 'em hard enough for breaking the rules and they'll follow the rules out of fear" is generally not considered to be a good model for organizational policy.
For public transport it makes perfect sense. You don't care about people getting on for free, you care about ticket profits falling because of people getting on for free. If the fine is high enough that they totally cover all the lost profit from people not paying the you are doing well.
I feel you've made a huge blanket statement here. Militaries are one organisation where the rules have really sharp teeth and it works well enough. In fact, military organisations have had strong selection pressure applied to them over the past few thousand years and heavy-handed punishments are the norm.
