I insisted on them telling me the salary range and it wan't particularly good so binned the 'application'.
That, I think, is the crux of the problem.
I understand that some, if not the majority, of sponsored cadets earn more than their instructors (?)
Whilst a comparison of salaries is perhaps irrelevant, human nature is such that the flight instructor (CPL/ATPL/FI/IRI/SEP/MEP/1000 hrs minimum) would expect to earn more than a cadet (NIL/0 hours).
It is usually the case in any other industry (including the airlines, of course) - senior/training staff earning more than junior/trainee employees.
A very good Post by 'bandie' - I imagine the location is very good, with many benefits to an instructor wishing to work in Spain (and a unique opportunity in so many ways).
The problem is that unless you are young and single or older (maybe with a pension to supplement your income) it will be difficult to manage if you are married (with a husband/wife who can't find employment of their own) or for a couple with children to support.
The salary may be adequate for some, and may be comparable with other commercial flight training schools, but as a stand alone package it appears to be poor for those instructors who may have other commitments and an inability to supplement their/their partner's income by other means.