Taking away a licence would be an additional step, which would only add to the task and probably involve questions as to the merits of the T&C's. Much simpler to refuse a new application.
Ice, stoppages and illness are all potentially valid reasons for such longer period than 14 days, as per the Act. So CRT would be wise to look to the next culprit, other than where it was super-demonstrable that the holder was having a complete laugh.
I feel that CRT would be making a lot of trouble for itself it it offered to drop action to remove a licence on payment. As I say above, I certainly don't think it can be influenced in deciding whether or not it is satisfied etc by some additional cash. In making that decision, it is in a quasi- judicial position. Whilst the Court could not substitute its own view, it will require CRT to be Wednesbury reasonable and payment is a very poor indicator of such.