I used to be a CFI at a large flight school in Santa Monica, CA (SMO). I believe their rate is $35-40/hr now and the CFI sees $15-30, depending on the type of instruction and how long the instructor has been there. Our chief pilot charges $45-50 I think and he has no shortage of students. I am all in favor of charging more for CFI's....As long as the CFI provides a quality product and conducts himself/herself accordingly.
-Neal