In effect, is it really that different to a fine? It seems to have a couple of advantages, though: it’s easier to collect, and it’s proportional, so a person who can afford a fancy luxury car pays more than someone in an old banger, without the complexity of having to evaluate their income and savings.

This is exactly the reason they are doing it. Proportional to income and the car is completely and physically removed from the road. There was a big issue here where the offender would just drive without license or the car was leased or borrowed so there was no real penalty. Now the leasing company would have to take responsibility for leasing fancy supercars to anyone and everyone and people lending their car to a known drunk or fast driver would definitely think twice.