Chuck - I think the reason is that, in the UK, most people training are as broke as a rat in Baghdad. Many have to save up for each lesson, and can't have the next one until they have saved up for the next one.
Somehow, the training business has to live off this kind of scene, and it isn't easy. I walked out of one flying school due to crap (dangerous) maintenance, and that company had an AOC for public transport.
It isn't 'condoned' as such; more like the customers cannot tell.
And right now things are pretty bad here due to the big fuel price increases.