Oceanus:
I personally think the entire group, instructors and students, should be using the "rental gear". Kinda like the way folks who pack parachutes are required to randomly jump with one they've packed... if you don't trust/like the gear the students are in nobody should be in it.
There's a bunch of reasons this wouldn't be prudent. First off, my instructor teaches up to 10 students. He has 11 sets of rental regs. Maybe a few more BCs and fins. There are usually about 6-7 staff at any given OW class. There's just not enough rental sets to go around for staff and students.
Secondly, someone has to pay for rental gear. Either the DMs and instructors have to rent it themselves, or the instructor has to pay to maintain it. The only way to offset this extra cost is to pass it on to the students.
Third, most dive shops are trying to sell gear. Most independent instructors even voice the opinion that it is better for a frequent diver to own and maintain their own equipment. What would students think if they saw all the instructors and DMs wearing rental gear? You are giving them the impression that either a. It's best not to own your own gear, or b. These guys don't even dive enough to own their own gear.
Fourth, I have selected the best gear for me. Other DMs in the class have selected the best gear for them. Rental gear is selected to be the best gear for MOST people. Students check out your gear in the pool, and are very interested in it. They ask a bunch of questions of all the DMs and can even try it out if they ask.
Fifth, I am used to my own gear. I have better trim, comfort, and familiarity with my own gear. If someone comes at me OOA in my own gear, I don't have to think to donate my safe second. If someone comes up to me when I'm wearing an unfamiliar BC, I will have to think. The better familiar I am with my gear, the better I can assist a student in an emergency.
Tom