1. The earliest organized crime syndicates date back to Mesopotamia, where exactly this kind of judicial philosophy was practiced; having a hand severed was likely a sentence of death by blood poisoning or starvation.
2. Let me tell you about how the first revolution in China happened. At the time, China was under the rule of emperors who embraced Legalism, which had the same idea that you seem to have about punishment; that without harsh punishment, no man will be honest, and that by brutally punishing all criminal acts, the people can be made proper.
Captain Shang Chen was leading 900 troops to Yuyang. As they were moving, heavy storms made the roads muddy, and it became clear that they would not arrive in Yuyang by the deadline. Shang asked his lieutenant, Guang Wu, "What is the punishment for failing to arrive at one's post on time?"
Guang Wu replied "Death, sir."
Shang Chen then asked "And what is the punishment for rebelling against the Emperor?"
Guang Wu replied "Death, sir."
Men are governed by a razor's edge of hope and fear; if the law is too lenient and has no interest in addressing the crime, then it has no power. If the law is too harsh, it has no power either, because the robber will become a rapist, and the rapist will become a murderer. When all crimes are equally punished, all crimes are equally valid.