Not true. Where licenses are available, there are in the order of 50 bucks. If they are expensive, they are because no new licenses are given and you have to purchase one from someone who already holds one - and that can get expensive. But it's certainly not true that local authorities are making big profits from this that they can't live without.
Around these parts, we have a very different idea of how society is supposed to work. Whereas countries like the US are run by free-market radicals who believe that everyone should be left to fend for themselves, we here in Germany any many other European countries have some notion left that sometimes, the weak and needy need to be protected and helped. For that reason, we have a lot of laws and regulations (like concerning public health insurance) that people like you would no doubt consider far-left.
The reason the taxi market is so heavily regulated is that taxis are considered part of the public transportation system. Taxis have to accept every passenger but also get certain privileges like being allowed to park where others aren't. And because they are part of the public transportation system, they also have to make extra sure that no harm comes to the passengers, and this includes a proper insurance for their passengers and having their car checked more often for technical issues.
This isn't some evil plot to rip off a poor poor American company, this is about basic safety standards.
It's probably also worth mentioning that the way Uber handles the (non)employment of their drivers is annoying everyone here, as well. If you are employed, you pay unemployment and pension insurance fees, and if/when you lose your job or you are too old to work, the insurance will pay for your needs. If you don't have such insurance, like the Uber drivers, the state will have to pay. While there sadly are many companies that handle things this way, it's not exactly met with appreciation by most people around here...