With motor skill training such as manipulation of an aircraft controls it is usually better to have an instructor who can explain the process from recent experience of having to learning it for themselves.
Havn't seen this in practice, the new instructors will generally just parrot off what their instructor taught them. A lot can have trouble explaining why they do things a certain way, but can demonstrate and teach how it is acheived. These techniques may be correct or not, depends on the quality of instruction they received.
I do agree however that a lot of experienced pilots can have trouble explaining how things are done. If the experienced pilot is coached in how to teach (and has the temperament) they should be far better at passing on knowledge by understanding of the subject matter and how to approach problems/concepts from different angles.
The problem here is that flying schools want their (largely inexperienced 150 hour) instructors to work for free, or at best, 1980's wages as illegal subcontractors, whereas By George probably (and rightfully) expects to be paid a fair and reasonable wage for his many thousands of hours experience.
I think thats the exact problem.
Flying schools am sure would have to raise their prices a lot if the industry instructors were paid properly, then I guess the merry-go-round would come to a halt sooner than latter as no one could afford to learn to fly, bit damned if you do damned if you don't!
In the past 10-15 years aircraft hire rates have at least trippled whilst pay rates have remained much the same. GST, fuel and maintenance costs have all soared and the flying schools are still are there. The ones that went broke were the ones not willing to change with the times and had poor management. As with the rest of the aviation sector if schools invested more money in good employees they would pay for themselves and profit from the work that they attract.
A good instructor may save 10 hours training to a PPL, not good for buisness if looked at each individual case but, a good instructor though reputation will attract 10 times more through the door if marketed correctly.