Problem is, you also have to pay for the aircraft. So if your ratty old 172 is $80 an hour, and your instructor is $40, thats $120 an hour. The Toureg mechanic is $105 an hour, and presumably you only need his services rarely. If your working on a rating, you need your instructor a lot, and those $120 hour days add up quickly. Drive up the cost as this author suggests, drive away customers, its that simple.
The problem is not that people aren't paying enough for instruction, the problem is often CFI's are willing to sacrifice too much of their wages to the FBO. If your charging $40 an hour, but the flight school you teach takes 50%, then your not making much. If you can take the whole amount home your not doing so bad. If the flight school makes its money from renting the airplanes, and the CFI's make their money teaching, everyone is better off. Works pretty well for flight clubs, no?