Amex, I must admit I have to agree with you in general terms.
One of the trends I have noticed over the course of my time in flying is that very human trait of "pulling the ladder up behind you." I can't help feeling that this paying for your type rating nonsense is just another example of same.
Example: I've seen people join a very small outfit, become trainers 'cos they'd simply been there six months longer than others, then find themselves in what, through rapid growth, is now a big outfit. These same people, who have now by default become pilot managers, decide to completely change the criteria needed to become a training Captain - criteria they would never themselves have fulfilled!! "Pulling the ladder up behind you."
I could give many more examples. The bottom line is, this scheme locks you in financially to the airline. You are beholden to them until the money is paid off. If you think that's fine, then there you go. But just because it gives you a way in, doesn't make it right.
Seriously, where does it stop? How about you take out a loan covering your salary for the next ten years, but don't worry, it's not actually costing you anything, 'cos we'll pay it back to you as your salary per month over ten years. Of course, if you leave within that period, then we'll want the remainder of the loan paid back immediately........but it helps us with our cashflow old boy, and why on earth would you want to leave us within the next ten years anyway? After all, you do want to be an airline pilot don't you?
ps: I have no problems with ab-initio sponsorship schemes, as they can give opportunities to people who could never have become pilots otherwise. But not paying for your own type rating. No sir.