Sitting here, that sounds like a reasonable argument. Yet experience shows us that people are idiots. They go around with the mentality of 'It will never happen to me.'

Have a look at this on the ABC today. Specifically the bit about the lack of road rules in the late 60's:

In the 1960s, seatbelts weren't mandatory, speed cameras hadn't yet been introduced and drink driving went virtually unchecked. It was a time of carnage on our roads.
In 1970, the worst road toll year on record, 3,798 people lost their lives.
That's more than three times higher than the figure for last year, when 1,194 people died.

There you are - evidence that laws about road safety save lives. That's no statistical outlier. Road deaths plummeted after the introduction of safety laws. Yes, they have reduced even further in the past 20 years with the introduction of better vehicle safety features, but that doesn't come close to explaining all of it.

I know we're not literally talking about removing the laws for cyclists. Yet, my argument remains: If the fines for cyclists are negligible, they will be disregarded. They may as well be removed.