As with many incidents (and "nearly incidents") it seems to me that this incident was one of those where no single occurrence was the underlying cause, but perhaps one single thing being done differently may have avoided "the straw breaking the camel's back".
Perhaps the controller ought to have realised the existence of the second aircraft earlier, so that the student could have been instructed to orbit whilst on the downwind or base leg - something that became second nature to me when learning at a small-but-international airport, as it's quite busy. Similarly, perhaps a more conventional go-around could have been issued - again, something that I did plenty of times as a student and with which your average student should have no problem.
On the tuition side, perhaps the student could have been held back a little from his first solo - but given the apparent experience of the instructor, there's nothing to suggest that the decision to send the student solo was the wrong one, and of course the only (clearly impossible) way to avoid the obvious added risk of sending a student solo is never to send him or her solo. Perhaps more stall/spin awareness or slow flying could have been covered, but even if this had been the case there's a world of difference between your instructor "surprising" you with a wing-drop into a spiral dive at 3500' and the circumstances in which this aircraft entered a spin. (And I've sort-of been there. On my QXC I inadvertently entered cloud, got disoriented and diverged well and truly from straight-and-level; thankfully the time my instructor had spent showing me IMC paid off, but my goodness, it was a whole lot more stressful than doing it "for fun").
On the communication side, perhaps there could have been better communication between the club/instructor and ATC with regard to the pilot's experience. For instance, at the airfield where I learned to fly you always give ATC a bell to book out, and in my early solo hours, my instructor would generally let ATC know my level of (in)experience whilst on the phone. In this case the fact that the pilot was in a club aircraft on a circuit-bashing exercise may have implied to ATC that he was relatively inexperienced, but of course ATC couldn't be expected to assume that (it could equally be a 200-hour guy filling in the last hour for his experience-based SEP renewal, for instance).
What we have, then, is a series of relatively small problems (deviations from correct RT phraseology, a lack of timely spin awareness, etc, etc) which, unfortunately, led to an incident whose magnitude, it could be argued, was out of all proportion to the events leading up to it.
Hindsight is a wonderful thing, and sadly we can't change what happened. However, sad though this incident was, I am confident that generally speaking procedures, both formal and informal, will improve as a result, and the skies will become safer to some degree.
David C