I sometimes wonder why the self sponsoring is under such flack. Not many professions, certainly not in higher education, are sponsored?
If you want to become a doc, you need to self sponsor your University education. Likewise for MBA's or the likes. Do they get lesser standards due to that? I don't think so, the washout process still applies, a bad doc won't advance or even pass his exam, no matter how much they choke up.
Up so far, any profession I have been in, I had to pay for my education enabling me to even apply for that position. Is that abnormal? I don't think so. Yea, right, McD or Tesco may have better conditions on paper, but is it really worth giving up the jobs you aspire for, just because it's easier?
I know, this means that a lot of talented people won't make it into the airlines because they can't afford it, while less talented ones will, but that is a fact of life in just about any profession requiring a higher education. Unless we want to go back (or go towards because outside the East Block it was never like that here) to purely state controlled education, that is the way things are, and even or especcially there, people did not get to their positions on merit either. (What was interesting for our work tough is that pilots had university degrees, something which might be very appropriate and useful here. After all, what lesser education does an ATPL with Jet rating e.t.c. have than e.g. a Lawyer apart from some of the academic requirements such as paper writing?)
For the rest, as has been said, it's a market thing. If the factor is 20 to 1 for each job, applicants will do whatever is demanded of them to get there if the job is still attractive enough. Stopping that could only be achieved by restricting the right to free choice of jobs or by going back to the days when you had to be a military pilot in order to be considered, but this would not satisfy the demand on the market in either way.
Just my thoughts. Self Sponsored CPL/IR/FATPL here, not flying professionally anymore, but still in the industry. Regrets? Not really, past that. What I learnt enables me to do my current job and some more. Like not every MD will become a brain surgeon, not every pilot will make the front left.