I think zeroborders is finding out that there are, in fact, borders, and that the culture and legal system here are quite different than in Australia. One difference is that petty theft, like soft drugs, is taken very seriously in Taiwan.
Yes, you are being railroaded, but the fact remains that you committed a crime, and the shop owner is within her legal rights to file charges and demand compensation. She's abusing the system, but she's doing it in a legal manner. I admire your urge to stand on principle. but you also need to ask yourself: Would I rather stand on principle and end up with a criminal record, or pay a small sum
and keep my record clean?
You're obviously going though a serious bout of cultural shock, which is normal for the amount of time you've been here, and exacerbated by your current legal troubles. Taiwan, like any country, has its good and bad aspects, and it's only natural that you're focusing on the bad aspects at the moment. My advice would be to not try to buck the system, at least until you have a better understanding of how things work here.