You're right it some respects, but wrong in others. The person who really cares about their car's performance is just going to buy a high emission car and constantly pollute. If you allow drivers to have different driving modes then those gas guzzlers might be enticed to buy a more environmentally friendly car and leave it in low emissions mode for their day-to-day driving and put it in performance mode when they want it.

Hell you could put a green odometer in it and give a tax break proportional to the percent of miles driven in green mode to encourage it's use.

Trying to force car enthusiasts to give up performance will just drive them to older cars which don't have crippling software or dangerous hacks to bypass the restrictions.