If you choose not to comply they suspend not only the registration but also your driver's license.
If you cause an accident with no insurance, you can face a law suit and have your license suspended, not be allowed to register a car, have your property taken and your wages garnished.
The moral issue... I know a single working mom whose car was hit by an uninsured driver. Her car was really old but she needed it for work. If you want to trash your car fine, but what about when you destroy other people's property? Would you be mad if an uninsured driver hit your car?