Open Des,
You can apply to KLM, they just won't give you an interview at the moment, because they have enough students leaving their own flight academy. As little as two years ago KLM did hire pilots such as yourself as direct entry captains on the F50, which could have gotten you onto the mainline senority list. You kissing Holland goodbye is your own choice, Martinair and Transavia are both fine companies.
You and I might not agree with KLM's preference for ab initio pilots from KLS, but nothing here has convinced me that it is illegal.