(on my own soap box)
You don't ever need to "break all the rules" to properly instruct these things - you are much better off teaching principles than specific cases. Yes, it can be helpful for students to experience the gritty end of aviation, but by breaking rules to do so you are merely reinforcing to them that rules can be broken at will, and that the end justifies the means. Proper decision-making and technique are not taught merely by placing your student in ever more difficult real-life situations.
I have known way too many instructors, most of whom don't want to be instructors in the first place, who get bored and try and spice up their day by inventing ever more difficult scenarios to test their students. Most of the time, it isn't necessary at all - a reversal turn, for example, doesn't have to be flown in the tight confines of a narrow valley to be flown accurately and safely. Some might say that the lesson is not learned properly unless there is an element of risk and "sphincter-tightening", but I'm afraid that theory of instruction was disproved many years ago. That is why airlines train in simulators.
I agree with Prospector - if you train that way, sooner or later you are going to get in too deep and then people die. It's an old GA mentality that seems especially prevalent in Australia and NZ.
As far as spin training goes, I have done a bunch of spinning in several different types... but, guess what... in over ten thousand hours, I have never come close to an inadvertent spin, nor is it likely I ever would in the course of normal flying activities. Why? Because I know better... common sense. Most people that do get caught out like that normally stall and spin at a level too low to allow a recovery. The Americans figured that one out back in the '70s and stopped mandating spin training, because they rightly concluded that prevention was better than the cure. Now we could debate that one until the cows come home, and I can see it from both sides, but frankly being able to demonstrate a spin recovery doesn't make you a better pilot - but not getting into that position in the first place most certainly does.
(steps off soapbox but keeps it handy for rebuttal)