Did it work 15 years ago? Not having been in the the industry then (actually still at junior school!) I can't really comment on what instructors are like compared to that time.
Why would anybody go through extra training for
"knowledge level indicators" to ensure that a potential instructor had a better, often much better, understanding of the particular subject element than that expected from an ordinary licence holder
rather than do extra training to get a CPL?
I know many instructors who still have the old BCPL and many are fairly good, but their view of aviation can be limited by the minimal exposure they have to the industry as a whole. Very good at the basics and the early mechanics of flying but maybe a bit limited in respect to flying outside of PPL instruction.
This is quite a generalisation, but accurate according my own experience so far.
We often forget what students want, if I was doing a PPL I'd want the most qualifed individual possible if it wasn't going to cost me any more. I would want somebody who'd proven their knowledge by not just passing an FI course, of which standards can be very variable, but who has also shown aptitude by jumping through the hoops required to pass their commercials etc.