I also feel sad about this, it feels like bias against the pirate ID. With the rephack and house space laws, pirates are basically attacked on sight by police and military (not to mention how lawful NPC's/bases treat them), and that puts anyone choosing to fly as an independent pirate at a great disadvantage. The police and military players will still not hesitate to go after pirate players, so if/when pirates try to turn the tables, even slightly, and still follow the rules by making a demand, they are now punished and even more disadvantaged.
Also I think its a cheap way to solve the problem. Why not place limits on demands instead? So that a demand can follow the level a player is at, and prevent outrageously high demands to guarantee combat. I also see players simply ditching the pirate ID and using another while house space, any house rebel organization, and Junkers outside house space, to be able to continue doing the exact same thing. So if the same thing is going wind up happening under a different flag/ID, why not just leave it be and let the players determine who's doing what. These indy pirate will just become indy Rogues, Unioners, Outcasts or Corsairs, etc. I understand wanting to curb pvp abuse but this is just going to shift it to another ID and limit inrp options for independent unlawfuls. One less good things about an ID that has very little anymore to encourage use.