The problem with collection on an as-required basis is...
IMHO the best option is to allow police to take DNA samples of people they can show reasonable suspicion of.
I guess you have a different definition of "as needed" than I do. These sound the same to me, and any definition of "needed" that doesn't include "can show reasonable suspicion" is problematic, I think.
To be fair, though, even in the case you presented...
if the police ask for your DNA and you refuse you instantly become a suspect
... do you mean to tell me you weren't already a suspect when they asked before you refused? Do you expect that the police will just swab the whole metropolitan area whenever any crime is committed? If they have no reason to believe you were involved why would they swab you, and if they think you might have been involved how is that different from being a suspect?