(also, this should reduce the amount that actually goes to the bad guys, since the amount of ransom would have greater downward pressure, i.e. if they'd probably not be able to collect more than $0.57M because that would cost UCSF $1.14M)
Also, it may not make the costs to them more. Remember the amount of ransom is based on what the ransomers think the ransomees are willing to pay. Today, the reason it was 1.4 million instead of 2.8 million, is that they didn't think UCSF would pay the latter amount. So if they knew UCSF would have to pay double the amount of the ransom, they'd have to only ask for half as much.
This would serve three purposes: help fund those things that are costly, deter the bad guys (since they can't ask for as much money if paying a ransom is going to be twice as costly to their victims), as well as to add additional incentivize people to secure their systems.
I don't know what you mean by ""catching bad guys" is just a pretense". Pretense for what? By who? That sounds very conspiracy minded.
Pay a fine to whom? UCSF is a state institution.
Many of the other recent examples are cities, counties, and so on.