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If that is the case (and I will not comment one way or the other), I think it is foolish. While it is true that there are a large number of people who take open water to be able go on a dive trip just once in their life, I think it may make more sense to take more time to invest time and energy in students who are seriously interested in diving. Those are the ones who will take further classes, buy more gear, go on more dive trips and make the industry healthier. If they have a bad open water class, then they say forget it and move onto another sport.
Now mind you, these are just ideas. I haven't done any market research. But I think developing repeat customers may be more viable business wise than one time customers. I could be wrong however.
However, I am able to teach with smaller ratios (1 instructor to 4 students) neutral buoyancy in the same timeframe as a single instructor (often with another instructor helping out) would teach 8 students on their knees. I co-teach, so no revenue for the dive shop is missed. I don't see the issue, unless instructors want to squeeze every dive out of their time. I think there are many instructors who sincerely want to do the best job they can.