Obviously in a perfect world the instructor should have both lots of experience and demonstrated high instructional skills. Students IMO should make a big effort to search for and train with those kind of instructors, particularly for advanced training (ie post PPL).
Good instructors, as well as good teachers usually grow into the job through experience, but this result isn't necessarily a direct result of experience. people entering these professions bring along a specific set of "baggage" as they enter the arena. Those bringing positives with them will grow and become better as they continue along the learning curve. Notice I said CONTINUE. A new CFI is at the beginning of what should be a career long learning curve that includes among other aspects, a dual role of both teaching students and learning from those students how to be an even better teacher and flight instructor.
Those bringing negatives with them into the teaching arena can improve along the curve but usually fail due to various reasons mostly related to poor attitude.
I agree that as instruction becomes more advanced, experience plays a much larger role in the instructor/student equation, but if this higher level of experience has been obtained by the instructor without corresponding proper teaching skills and/or at least an improvement in teaching skills on the part of the instructor, any advantage of higher experience can be easily nullified and actually be detrimental to the student.
Good teaching is both an art and a science. Above that, to become an excellent teacher, one has to carry with them a genuine desire to teach. You find these qualities in a CFI, and you have found the RIGHT instructor, be it in a J3 Cub, or a 747 :-)
Dudley Henriques