I don't think its a harsh law. Its in fact rather brilliant. Its bound to drastically cut down on unwanted litters of kittens. I bet there are still dozens of ferals running around, but its probably a lot better than ever before.
All my cats are indoor only (with the exception of Allen who gets a whole 5 minutes of fresh air in nice weather) They are all happy, healthy, cats who get plenty of alone time. They have their choice of open window sills to watch the world from. I open the windows whenever possible to let breezes come in and they all LOVE it. They watch birds, chipmunks, squirrels, rabbits, groundhogs, etc from the safety of their windowsill. They have oodles of toys inside to keep them active and occupied. The only downfall I see is that indoor only cats are generally more prone to obesity than indoor/outdoor cats. I offset that by interacting with them and making them exercise with a feather teaser and ribbons. I also feed them food formulated for indoor kitties. (well, used to, but thats another story)