What I don't understand is why the idea of paid instruction is contentious. It already exists, being done both by individuals and businesses. The reason that it is not more prevalent is that the market value for training really is $0 for most people. That's because there are plenty of people willing to give it away for a thanks, or the simple joy of helping someone new to the hobby.

That's the barrier to entry for a prospective business owner.

Yes, there is a market to paid instruction. That market is quite small, because most people in the hobby aren't don't need to pay for instruction, or see the need to do so.

T28pilot brings up a good point. If I'm both paying for the instruction and providing the trainer, I'm holding the instructor responsible for ensuring the safety of my equipment. As Crash_N_Burn said, that is why most schools provide the equipment.

There's a distinct downside to using someone else's equipment. Part of training is learning how to set up an airplane, and learning how to correct the mistakes you made in constructing it. Radio setup, engine break-in, and preflight inspection are something that beginners should learn first hand, and on their own equipment. Learning how to tune a well broken-in engine won't help much when the beginner goes about starting up his .40LA for the first time, or has problems adjusting the mixture on his engine.

Paid instruction really does need to happen at a private field. I'm not giving up my flying time so that some guy who's in it for the money can have his student up in the air by himself. I'm willing to share, but the student isn't getting his money's worth if they're sitting on the ground waiting for me to finish.

All in all, there are just as many downsides to paid instruction as there are to non-paid instruction. In the end it's the quality of instruction that matters, and in no way does paying for instruction guarantee that the quality will be any better.