Cape don't need FO's in it's main aircraft, so yea there would be a problem with a pilot using them purely as time building. The biggest being that you would be much better off at a busy flight school if all you care about is hours. Now, will it stop you getting a job at a regional right now? No. But you lose the ability to ever come back and any potential employer that calls is told you left on bad terms. Again, probably not enough to stop some regional from hiring you right now, but at some point you are going to get laid off and need a place to go, or move up and have interviews with United, Jetblue, American, etc. Most of which have relationships with Cape and the management there. So I would say that is is short-sighted but it does happen.

As for the training department, they have a sim and a bunch of spare aircraft around right now. This winter the weather was so bad that you had aircraft getting stuck at out-stations and spare aircraft at Hyannis being the few without GPS or boots. Speaking of training, I would much prefer to mess up at Cape and get given a 2nd or 3rd chance than booted out of class at a regional.

If you want to fly regional then stick to flight instructing, getting hired for peanuts for first few years flying bigger equipment, being treated like crap at both, and hoping that you pass training and that the airline doesn't fold before you move to the left seat and get enough hours. Otherwise you will spend few years at Cape and then take a paycut going to bigger regional.