Ah Pace - agree with alot of what you say, but disagree with a lot too!
Lack of convictions is simply down to CAA resources and weak law. Putting any safety issues to one side for a moment, the fact is that the main document you require in order to perform flights for hire or reward is in fact an Operating Licence, not an AOC. The Operating Licence in essence is a commercial right to operate CAT. How do you get an OL? - One of the mandatory qualifying aspects is an AOC!!
It's the OL that is amended should you choose to operate scheduled services, operate larger aircraft etc...it then ramps up the financial fitness and CAA bond accordingly.
There has been such a massive surge in operations of small jets and turbo props, both CAT, corporate, private and of course unregulated illegal CAT that the CAA have simply been caught wanting, and now have mountain to climb to tidy it all up. It's a mucking fuddle.
Re AOC's - Alas you are quite right. There are operators that are under par, under resourced and under performing I'm sure. One would hope that the audits from the CAA picks up on that, and ultimatley said operators shape up or ship out. The current financial situation is hurting more for some than others, and its where the wheat is seperated from the chaff. Darwinism in action!
Unfortunately, in grey land (black land) those operators that are below par, and not performing well are simply not picked up on, and it's the passengers in the back that are unprotected and at the mercy of one or two individuals that think they are beyond the law, and perhaps don't even realise themselves that they are operating under par.
We all have a responsibility to raise the bar, and not just sit idly by while a few spoil it for the many.