FBW...you are correct in a chicken/egg sort of way. My current school charges about £130 per hour...yet still doesn't really make money of training. Part of the problem is paying for full-time or part-time administrators and the paper CFIs who do not contribute to flying tarining but take a salary/retainer. This subject has been done to death on this forum, but sooner or later there will be two types of flying training etsablishment...cheap and cheerful with inexperienced FIs working for pennies...and quality establishments paying a proper salary for FIs ...in order to keep them. This split is firmly established between PPL and CPL training, but if we trained people properly at PPL level, then the CPL would be a mere type conversion oto a complex aeroplane. Total waste of money = CPL.
Still ranting but now off on a tangent!
Gets worse