Don't throw the baby out...
I might be in a minority of one here, but I think there might be a little kernel of a good idea in all of this...
I had this same idea when I was half-heartedly giving up smoking. Picking up a ten-pack for £2.80 at the cornershop on my way to the pub was easy, but if I had to send off for a licence I probably would have stuck to my original decision to give up. Taking up smoking again after giving up is an impulse decision.
The thing would be for the tobacco companies to issue the licences themselves, so it wouldn't cost the government a thing. I would also find it unlikely that the tobacco companies would charge smokers a great deal, if anything, for a smoking licence.
Of course there are many ways you can round a licence - get a smoking friend to buy you cigarettes etcetera but what it does do is stop you buying cigarettes just on an impulse, which helps those who want to break the addiction.
Now charging every smoker £200 and getting a doctor to sign it off is another thing entirely!