I think this discussion has probably run its course but it has been very interesting - thank you. Sometimes it is well worth challenging established ideas and sometimes it is worth seeing if there is any merit in these ideas which is of course always much harder when you are already firmly sat on one side of the fence.
A couple of final points
A flying Instructor is a professional working in a recreational industry with customers who are flying for leisure.
and
Volunteers cannot be "told" to do anything unlike a paid member of staff, basically you generally have to suit the role to the individual not the other way around. You have to have a code of conduct and the volunteers have no recourse in law for employment rights
Bose makes a sound point in response to the question I asked. FIs are professionals and hopefully whether they are working for free or not they maintain the standard they were taught to set. I agree if you are a volunteer the relationship with your "employer" is different, but it is often not as different as you think. Indeed sometimes volunteers, particularly when they are professional volunteers, are more committed than employees. Do you think a doctors who work for FDOC are less or more commmitted because they give their services for free? Why do you think they give their services for free? Perhaps it is because it is something different, something enjoyable, a way of giving something back which they are happy to do all the time the normal day job pays the bills. Moreover, it is a lot easier for a club to not seek the help of a volunteer in future if he is not up to scratch than to dispense with an employee.
There are clubs up and down the country involved in a whole host of different sports which are very well run and run largely or wholly by volunteers. Closer to aviation, I dont know how many gliding clubs operate - are their instructors paid and if so how? At any rate powered flight schools have always been "potected" by the regulator. Not many pilots are prepared to incurr the time and cost to do a CPL and FI and not get paid. FIs who are not CPLs are a breed not encouraged by the industry.
If EASA change the rules the dynamics of the whole industry may change.