I think philosophically what you write is true....I doubt too many would find that antithetical. Lots of pros that ski mid-level offer great lessons for mid-level skiers....but there is a limit to how far you can take this.
1: In skiing you need to be able to ski the terrain your students do. While it is true a good bump lesson could easily spend 80% of the time outside the bumps...you do need to go there at some point. Hence if the instructor cant get down the bump run, the lesson will suffer. Nothing worse then waiting for your instructor!
2: Somewhere along the way instructors forgot that a big part of their job is to inspire. Watching what is possible, can for many people be an eye opener to greater learning...by simply being an example as to what is possible. Without this you end up with "small town hero" syndrome...where the mediorcre is prasied for being great, when in reality it is anything but.
3: Finally just like in football, how many WC coaches were great WC skiers? Like football, not many. But having said that, dont kid yourself into thinking these guys cant ski. Sure some might be "over-the-hill" hence you are not seeing their "A-game", but in their day they ripped. Good enough to be WC? Often not...but unless you have skied with WC skiers, you really cannot grasp just how f#%king good these guys and gals are....I mean really. Hence they dont need to be WC to still be better then 99.99% of skiers on the planet....same for football coaches...did they make the NFL...maybe not...but first string on a top collage team is far better then most...
4: Apart from skill you also need to consider physical make-up. Top level sport success is about the total package...look at Doug Flutie....Heisman Trophy winner...but at 5'9 his NFL prospects were limited. NBA is even worse....Skiing is no different, a taller person will always have an advantage over a shorter person...taller=longer legs=more suspension.
5: Apart from skill and pysical make-up you rneed to consider the mental make up. Ever run a WC DH? Seriously, you need to be a few fries short of a Happy Meal to do that...it is SCARY! Not everyone has the mental fortitude or "mental toughness" to do it. I bet diving headlong into a 350lbs lineman to catch the ball with no regard for your own body is kinda similiar. Skill vs. Performance is not always linear.
6: You also cannot forget the reality of money. To make it as any pro athelete requires cash. If mom and dad dont have it, you are outta luck. Tons of money goes in, before a cent comes out. Sure we have all seen the feel good movies where the kid from the poor neighbourhood doesnt give up and makes it to the big leage to be a star...but there is a reason they make movies about this...those people are rare, and very few can make it on this road. If they do, they often are stars, because the only reason they made it is because they are so good no-one can turn them away.
Hence just because a coach wasnt a NFL star is not always because of no skill...lots of other factors come into play. I can tell countless stories, where skill and heart where in abundance...but either the physical makeup, mental toughness or cash wasnt, as such to stay in the sport they loved...they became a coach.
SD, I don't think I'm a mid-level skier. I generally can ski most anything I encounter, and when I take lessons, I generally am in the level 9 groups. So I don't think agree with your comment here that a high level skier, which I think I am, is unable to learn from someone who's skiing isn't perfect.
At a certain point in skiing, you are well aware of the mechanics. You are aware of the strategy. You are aware of the touch, and the power elements as well. You don't necessarily need any demos, what you need is a coach that can highlight the errors you are making and find a way to communicate them to you.
Further, learning styles differ. Some folks learn well from demonstration, others need explanation and to feel it themselves. And I doubt that any WC coach is demonstrating technique to their athletes. They use film to discet the athletes skiing and to compare it with other athletes.