You're not missing anything. It's completely nonsensical and illogical, as is the fact that it's the tourism industry that's pushing to make it more difficult for tourists to come...
And here's more illogic:
Let's see, it's legal to rent out condos for over 30 days, but illegal to rent them out for less than 30 days. So how do we solve the illegal rental problem? Why, limit people's stays so that only illegal rentals are possible! (Though of course the reality is that the THA would prefer that all condo rentals be banned, and that all visitors be required to stay in hotels.)