The real issue is that there seems to be a norm in the industry to only try identifying such instructors *after* accidents happen.
I made this analogy before, and I hope it can explain what I perceive to be the problem.
Right now a school in my area is having a significant problem. It is a school with a very poor student demographic, with the vast majority being recent immigrants with poor English language skills. Consequently, they are on academic watch because of past performance on state exams. They have to improve or be hit with penalties. At the end of last year, they had to hire a new teacher to fill a position, and they formed a committee to do the hiring. As is standard, all applicants had been through a concentrated university program. All had done student teaching. Some had actual teaching experience. All had references that had to be checked personally. All had met stringent state licensing requirements. (And they really are stringent.) All had passed a difficult required exam. The committee was divided between two candidates, and finally decided on one that really seemed to fit the bill. The majority of the hiring committee was sky high in its recommendation, and he was hired.
It took about a month of teaching for them to realize that he was an absolute disaster as a teacher. He was doing nothing right. His students were learning nothing. His students were going to bomb the state exams, putting the entire school at risk for sanctions. Hiring and firing in mid semester is a real challenge. Yes, it would be possible to get him out of the classroom, but how do you find and hire a qualified replacement with such short notice? Despite their most sincere and dedicated effort to get a teacher who would help them get out of their academic mess, they got one who made it far worse.
Something like I just described happens all the time throughout the world of education. As someone who has hired many such people, I assure you that the most careful process I have ever followed has led me to hire people who turned out to be total duds. The teacher hiring process has a thoroughly developed (and very expensive) infrastructure designed to make sure that only the best and brightest teachers are hired. Despite that infrastructure, absolutely incompetent teachers are hired by the thousand.
As things stand now, the scuba industry cannot possibly match that infrastructure. It cannot possibly provide that level of training. It cannot possibly match those entrance requirements. The only way it could would be to put in place a government bureaucracy to match the education establishment, with an unfathomable increase in cost and with no guarantee the results will be any better.
The only solution I can see is through quality control at the local site. If a potential teacher graduates from UCLA and proves to be incompetent after being hired, it is not UCLA's responsibility to investigate and deal with it. The school that hires him or her is responsible for supervision, retraining, and (possibly) firing. If the incompetent instructor Rob mentions works for a shop, then it is the duty of the shop to make sure that he is teaching up to their standards and deal with it if he is not. If he is an independent, then we have only the market to apply such pressure.