adamlouis - unfortunately your math is totally wrong as there are many factors missing in your equation and things such as fuel, maintainance, insurance cover are not for free (as sapperkenno has pointed out).
What about income and other taxes ?
Using your calculation, you could probably subtract 120 per hour overheads from your 170 - rather leaving you with 300 a week or 13800 per annum before taxes. You would have to work a lot to cover the initial cost of your aeroplane. You have to start thinking more like a businessman than an aviator...
Do you know what it costs to put a C152 in a proper hangar ? Oh - you what to park it outside, but I doubt that will be free and will surely reflect on the maitainance bill sooner or later.
As I tried to explain before - as an instructor it does not suffice to just get an aeroplane and start instructing with it - in order to get this, you need a training programme, a training syllabus and operations manual to receive an ATO approval - which all cost time and money. This would be the equivilent of founding your own school. Most small schools are suffering currently - I know of at least one that is trying to sell their ATO (which even includes an own AMO approval) already for 5 years and they can not find a serious buyer.
So either you get more planes into the fleet and cheap instructors trying to get hours to expand your small profit or you find a flying club which consists mostly of voluntary staff on weekends to keep the price/h as low as possible.