Young instructors will work for low pay to build hours.
If you legislated to set, say, a 2000 hr minimum experience level prior to someone obtaining an instructor rating, then schools would have to pay a decent wage to get people who could be making good money elsewhere, and flying schools would be staffed by experienced pilots, both good things in my view.
The cost of flying training would rise, turning people off the idea and maybe making it hard for schools to stay afloat in the short term, but if (as we are told) the aviation industry is going to continue expanding, the demand for pilots should drive wages up across the board and make it worthwhile for young people to invest in a CPL.
The alternative is to continue as we are, with low-hour instructors working for not much and no incentive for more experienced people to come back into the training system and pass on what they've learned.