Having a reputation as a demanding instructor is IMO a good thing. I set high but fair standards and was very clear about what I expected. I was not shy about indicating my disappointment when students did not prepare (special one off circumstances excepted). The good news from my POV is the keen students tended to gravitate my way and the tossers picked other instructors. I will caveat this by saying I worked at a large school so there was a big pool of instructors and I had an "old school" method Chief Flying Instructor.