Exactly.
Say someone is guilty of a heinous crime and is on the edge about it. Confession to a priest can bring about a resolution of those feelings. A priest can withold forgiveness if repentence is not shown, and can make confession to civil authorities a condition of absolution. A priest can counsel a person and make him see the necessity of turning himself in. This may not happen immediately, but if a person knows he can in confidence discuss such things, this may be the end result.
On the other hand, a person feeling pangs of guilt and wanting to talk to a priest but who knows that the priest is a de jure arm of the law will liekly avoid seeking out the priest's counsel to begin with.
Bottom line: there are confidences protected in law (husband/wife, attorney/client, penitent/confessor) that have a long legal history. Fracturing them is an unwise thing.
SD