Yea...I think they should be able to go back and yank the certificates of any instructors that signed those guys off for check rides and then go back one level further and yank the certificates of the instructors that signed them off as well. Should nip the problem right in the bud.
Basically the rule could read something like this...
Student gets a fail on a check ride, he gets additional training and then a re-ride. Student then fails the re-ride and then sits out for 30 days. Student gets retrained then fails the third ride...so then his CFI gets his tickets pulled, along with whoever signed him off for his rides, as well as the examiner that did the questionable rides for both CFI's.
I can live with that type of set up. It would definitely cull the herd down a bit, plus there would be an incentive to give good training.