I agree, I think one motivation for them to jack up the interest and fees, is to get a higher percent of whatever gets paid out than the other creditors do.
But I think that in a bankruptcy the credit cards should have to restate the last three years and apply all payments as though only legal interest was charged, with the rest of the payment reducing principle. That way the credit card company could only claim in bankruptcy the principle plus legal interest, they would lose the excess profits from raking people over the coals with dirty tricks. (That might be what you were trying to say, but you said apply to the additional interest first. I say ignore the additional interest and fees.
My inclination would have been to apply payments toward the interest and fees, but not allow those things to count against other creditors. I can see that applying all payments exclusively toward interest and fees (until they were paid off) could be unfair to other creditors, but it wouldn't seem right to totally ignore those things either. Though maybe it wouldn't be unfair. True, one could end up in a situation where a credit card company would recover nothing when someone goes bankrupt with $0 in principal and $10,000 in interest, but perhaps that wouldn't be such a bad thing if companies knew that was the rule.