You will probably be surprised when I state that I agree with you in general.
Nobody wants a dictatorial state, which puts you under constant surveillance and jumps on you for the smallest of infractions (Singapore being again a great example).
I do feel, however, that this Instagram self promotion shit has gotten so badly out of hand, that drastic measures may really be justified.
As the article explains Iceland's nature is very fragile. Hell! They even employ speicalists to determine if any elfs or trolls are impacted by roads construction[1].
Now, you may think of this what you want, but to the people of Iceland this is important. And assholes, which metaphorically shit on their living room carpet for fun, profit and self promotion really don't deserve lenient treatment.
So. no! I would't recommend such treatment for a couple youngsters that got a little loud after a few drinks, or for a tourist who makes an innocent mistake.
But self entilted scum, who feel they have a god given right to abuse anything and anybody, destroy fragile nature intentionally for that "great shot" (which was taken hundreds of times anyway) despite being fully informed that their action is illegal, well, yeah. I wouldn't have a problem with that and actually think it would make everybody's life better. As a matter of fact: There's a level of assholery where I would deem my suggestion absolutely proportional.
YMMV, of course.
[1] https://www.theguardian.com/artanddesign/2015/mar/25/iceland...
Edited to add : You added the second link (three strikes law) later and I think you should have added an edit tag, since it's an actual change to the whole semantics of your comment.
I think that introducing a trait, which only can be found in the American justice system and is mostly (if not entirely) geared towards minorities and is actually outright racist as an answer to my comment is pretty much a strawman.
Adding it later without tagging that fact makes it intelectually dishonest too.