Luke, I agree with many of your sentiments. There is no excuse for 14 instructors, etc.
But, you say that tin pot small organisations don't vindicate 'sausage' factories. This suggests to me that you will forgive the small organisations failings but not the 'sausage' factory failings.
My main gripe is the generalisation that 'sausage factories' are no good and small organisations are.
The truth is that there is a wide spectrum, there is good and bad in most organisations, and most types of organisations.
The sausage factories I have been involved with went through stages of good and bad. Dependent, usually, on whether the CI, CFI had high standards AND was strong enough to stand up to the bean counters at the top.
With regard to how staff are treated, I agree that morale is a very important factor. However, I think a personal professional approach should see 'the cynical and uninterested' leave rather than subject their students to their own 'who cares' attitude.
To blame (not you, but the individuals described in your post) 'manangement' for treating staff badly thus causing poor service to the student, is unrealistically absolving those responsible for their own actions. Management may be a causal factor, but once again, instructors should take out their frustrations with management on management, not on the poor ($$$$) student.
Oh for the utopian world, where instructors (and all pilots for that matter) are paid what they are worth, and we can weed the industry of those whose standard is only the making of a buck!
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ChickenTrainer