This is all good, but I think there could be two things changed/added to make it better and more realistic.
First, as the subtitle suggests, there isn't really a point in going to jail. Not in Skyrim, at least. In previous games, it was used even by non-roleplayers because you could attain higher levels through dropping skills while in jail. In Skyrim, you only lose progress toward the next level of a skill, which means this trick doesn't work (as you only gain Level XP when you gain a full point in a skill). The "we're just gonna kill you now" threshold got me thinking that another sort of threshold should be made. If your bounty is, say, 150 or less, you would only get arrested if you could not pay the fine. If it's between 150 and 10000 (which I believe is the "kill" threshold) then you no longer have a choice. You MUST go to jail. Obviously if it goes beyond the "kill" threshold, they would still try to kill you.
Second, bounties should decrease over time. Statute of Limitations, anyone? If you can manage to get out, and stay out, of a hold you have a bounty in long enough (up to several MONTHS in-game for an incredibly high bounty) then your bounty should decrease to nothing.