Its not ridiculous PoonPossum, its all dependant on which company you're talking about. As with any insurance the requirements depend on how much the company is prepared to pay. If they're happy to pay higher premiums then the insurer is happy to accept people with lower levels of experience, if not then they aren't.
But back to the topic at hand. I'm sort of in the same boat of wondering whether I want to go down the instructor path, except, I have a bit over 1100hrs right now, some multi time and have been involved in a few different operations I'm starting to wonder if maybe I have enough to actually pass onto students.
As everyone said, don't treat it as an hour building exercise, aside from all the points presented above you'll be churning out students who probably won't be up to a higher standard and therefore put themselves at a higher risk of having an accident. Don't forget than when they do its your name sitting in their logbook quite possibly attached to the training flights that affected their accident!!
Instructing shouldn't just be about your logbook, it should be about taking pride in helping to get pilots to a high standard therefore protecting not only themselves and you but the many passengers who put their faith in them and the training they've undergone.