If you did that, you would effectively ban domain name ownership from everybody who does not make a lot of money from their domain. Is commercial activity the only thing which should have domain names?
Not necessarily, though there may be other tradeoffs depending on the approach. E.g. you could make the price base*registeredDomainCount^2 instead of base at the cost of registration privacy or you could have the max sanctioned transfer sale price capped (relatively) low at the cost of risking high demand domains be under-utilized or maybe something more inventive. After all if you can only squat a handful of domains before it becomes a loss or not worth waiting for it sure beats squatting hundreds or thousands being a valid business model.
I don't necessarily prefer any proposal I can think of I just wanted to highlight "Domain name prices should be such that squatting is unprofitable" can be taken in much more interesting ways than "make owning a domain outrageously expensive".
