Personally it depends on the aircraft type and the runway I am using.
For example if in a retractable undercarriage aircraft I won’t let my students do solo touch and go. If it is dual then I tell them to leave there hands on the throttle (s) and maintain directional control while I raise the flaps re set the trim and then if sufficient runway available I tell them to apply full power.
If I am in a non retractable undercarriage aircraft on a long runway then I allow the student to reset the flap and trim and apply power. In this case I am judging the students ability to assess whether on he/she has sufficient runway remaining to conduct the touch and go and his ability to maintain control of the aircraft during this sequence.
But what are we teaching students here? We conduct circuit training to teach the student how to take off and land, so therefore this should be the foremost in our mind. The only reason we do a touch and go is to save time. So therefore the main aim of most circuit lessons is to teach the student how to take off and land properly. I believe as instructors we spend to much time teaching them the correct touch and go sequence.
In fact in some aircraft the most critical part of the landing sequence is when the aircraft slows to taxi speed and the controls become less effective. (For example a tail wheel aircraft doing a crosswind landing )