This discussion has rambled on for 4 pages with clearly no general agreement. I wonder why?
There is a huge difference in PPL & CPL requirements in Oz, the UK & USA. In Oz there are not so many private helicopters as there appears to be in UK & USA, hence the need just for a PPL. In the UK ( I don't know much about the USA system) you need around 700-800 hours to qualify for a CPL but in the meantime a PPL instructor gets paid for instructing. Reading Pprune it looks as though the vast majority of these PPL instructors only do it to get the hours to qualify for a CPL.
In Oz, if you get your FW CPL first, about 100 hours I think, you then only need around 60 hours for a helicopter CPL. As I am semi retired these hourly figures could be wrong but not by that much. Would you consider a 60 hour pilot experienced enough to take an instructors course or go fly commercially? Therefore he has to have around 400 hours to do his instructors course. As most students here go for a CPL, do you think a 400 hour instructor has enough background experience to teach him all that a commercial pilot needs to know? Remember quite a few of the smaller companies have very little check & training systems in place, so the new pilot can be let loose almost immediately. However, often the insurance companies won't let you insure such a pilot, so it becomes the chicken & the egg problem.
As to the quality of instructors, it's obvious that they must be able to teach first & foremost. Having 1000s of hours is useless if you are a lousy teacher.
It appears that in the UK & USA, a lot of the new pilots only want a PPL & hope to pay the least amount possible to get it. As they don't expect to fly IFR, at night, in bad weather ( until the weather misbehaves suddenly). land on mountain tops or oil rigs, etc, etc, then perhaps they can learn just enough from your 200 hour instructor to survive while they gather more experience themselves. However if they hope to become a commercial pilot down the track, wouldn't they be better off with some more in depth instruction?
I base my thoughts, probably not too eloquently, on having a reasonable amount of allround experience. I had my first helicopter lesson 51 years ago & have been an instructor/check pilot on & off for the last 40 years during which time I have flown with numerous pilots, many nationalities & could always tell what sort of instruction the pilot had in the beginning. The one saving grace I have noticed is if a person had natural ability & common sense, asked questions & tried to learn more, then as long as he survived the first few years, all pilots ended up pretty good regardless of their start. Like car drivers, some are good quickly, others never are.