R44-Pilot:
I've tried to research the price difference per lesson in a R22 vs. S300. Granted, there are not many schools using a Schweizer in the UK (I only found one in a quick search on Google), but the one I found was price wise in the ballpark of other R22 schools - even cheaper than some.
So no argument there.
Think you can't find an instructing job in a 300? Or feel the pressure to be working in the R22? I've been there, done that, got the t-shirt (literally)... that's why I have 40 hours in it and decided for myself not to go down that route. OK, I did my training in the US and here are certainly more Schweizer schools than in europe... but than there is almost no other way to get hours and therefore a career over here other than instructing, meanwhile you could at least drive a bus in the north sea.
As far as experienced instructors are concerned, its definitely an issue that probably will never be solved. There are not many high time pilots out there who would like others to try to kill them for 15 bucks an hour - and that applies to all small pistons.
As an instructor you even have to rely on the fairness of your boss to eat the bill, should you ever f*** up, because insurance is mostly outrageous and not affordable on a instructor salary.
Turbines are not the answer, but there are other products from Schweizer, Bell (or even Enstrom - although I have no time in 'em) that are better suited for the job - even intended to be a training aircraft (!) - and give the student (and instructor) a fighting chance of survival.
It is almost comical, if you factor in the mandatory rebuild and difference in live limited parts, the R22 is only a few bucks cheaper! For the operator that is.