You cannot mine resources such barbaric methods. The price of amber is extracted in Ukraine is very low because illegal miners don't spend the money to restore destroyed forests. I think that the case for legalizing this business will lose their attractiveness.
5k$/kg not that bad. I don't see what's "barbaric" there. Very ecological in my view. And no need to restore, the trees do it by themselves!!!
The advantage of legalization is that it bring state security (no more gangs to pay for "protection" even if the mining is poor.
Anyway if you have more lucrative sources of income for the locals, they seem more than willing to work...