Whatever the reason, simply dropping the requirement for a medallion (where it already exists) means you are deliberately screwing people who have paid as much as a house to own one, worked for decades to pay it off, and plan to sell it to fund their retirement. Changing the medallion rules to suit Uber's business model means bankruptcy is a certainty for a lot a very hard working small business folk, or (more likely) a huge compensation bill for the city/state.
In other words, if you change the market rules by removing medallions from where they already exist, everyone loses except Uber. Fine if Uber were offering some massive social benefit that outweighed those costs, but it's not, it's just a bunch of dodgy cheap-labour capitalists running a dispatch center "on the internet".