I think you're missing out how much that would completely kill indie devs. For that, they'd have to have a Nintendo-like approvals process so only the largest say 70% of projects would even get into the pipeline. The occasional Active Shooter is worth it to allow hundreds of other small devs to make stuff that's not offensive.
Sure, the cost might not be too much higher than the $100, but reviewers are finite in number and ability, so they'd need to set marketing pricing for applications, to throttle the amount of applicants down to a level that they can cope with. So, even if the "actual" cost of approvals becomes only $300, they'd need to charge maybe $1000 per game, just to whittle down the applicants in the pipeline to a manageable level. And that's not the cost to launch the game, it's only the cost to have Steam's censors go over it and give it a yes/no approval. You won't get that money back if they don't like your game, because that would unfairly push the costs of checking your game out onto all other games.
Active Shooter didn't even make it to the point at which it could be sold remember, so ... system working fine.
And think what you're asking for there ... corporate censorship so that "problematic" things disappear before we the public can hear about them. That's a very dangerous route to advocate.
EDIT: Especially when Active Shooter's main fault is that it's conceptually problematic. Do we ban games in which you can choose to play the Arab side like Battlefield, because people could use that as a "terrorist simulator" or games where you can play a Nazi? How about Postal? Grand Theft Auto? What's even the criteria here? Then, remember that people would start petitioning Steam to remove or block things because they disagree with their sexual mores - the entire gamut of sexual mores. So Steam would turn into the World Police for sexuality in games, trying to balance the Christian Right on one side vs SJWs on the other side, both wanting to change the rules on how games are approved so that ones with too much gay/straight/cisgender/transgender/loli/big-boobs etc etc etc are blocked, depending on who's doing the asking.