"Do you know what the California DMV did? Absolutely nothing. They called me back, and told me that as long as the forms had been completed correctly, they had no further interest."
I can't think of anybody less qualified to make decisions about peoples' health than a DMV worker.
And that's precisely why they do not make those decisions in any state that I'm aware of.
If an authorized health care provider, usually a doctor, signs the appropriate forms certifying that you have a qualifying disability, a DMV worker does not have the authority to say "Well, this busybody from your work says that you don't act like you're really disabled, so I'm not going to give you a placard."
There is no question that a lot of states make it too easy and a lot of doctors sign the forms too freely, because they want to keep their patients happy and have nothing to lose by signing, but could face liability if they don't and the patient ends up falling while walking across the parking lot. So why chance that?
Yes, some people illegally use (possibly deceased) grandma's placard, but many more get them quite legally from their friendly doctor. At that point, taking it away becomes a matter of due process like everything. And I don't know how things are in your state, but if I see the lines at the DMV, it's kinda obvious that they don't have unlimited resources to go after every soft-hearted doctor or chiropractor unless you're willing to pay a LOT more for your car registration and license renewal. And let's not get started on police priorities....
Lest anyone gets the impression that I don't share the OP's anger at the abuse, I do. I have dealt with a somewhat serious health issue for over a decade now that on occasion puts me on crutches and in a wheelchair, and I have a permanent placard for that reason, which I only use if needed. And I'm quite ruthless when others' violations are obvious and affect me. I take credit for two $500 tickets I got people for in one case parking without a placard in the only available HC spot and in the other case parking on the white stripes so I couldn't get into my driver side door. (Knowing most of my local PD personally helps getting a speedy response everytime.) But such cases are clear-cut violations with no grey area, and I'm the victim. Neither applies to the OP's situation.