Does the 'hour building' instructor really exist? I'm pretty sure that most FI's wised up years ago that the way to secure an airline job is simply to purchase a type rating.
Surely nobody gets into instucting now thinking it's a fast track to an airline job? For every job that requires a few hundred hours of SEP time there's 20more that require you simply to purchase a type rating.
As for the experience counting for something, I agree that it's pretty worthless in the current market. Of the FI's I work with, several have over 2000 hours with hundreds of hours of multi IFR time. None of them expect to be able to move into an airline job based on this. None of it counts for anything compared to a freshly minted 200 hour guy prepared to pay £25k to get into Ryanair.
This is the reason instructors are in short supply, it's no longer a viable route to a multi crew job. So taking this into consideration what you now end up with is instructors getting into the industry because they want to do the job, and enjoy doing the job. The fact that there's fewer of them is no bad thing.