What is it you think they should do?

There are a few ways to view it though, these may be the kind of people that GLA attracts (likely to wash out). Also, at some level, it's hugely inefficient to train people just to have them wash out, even if you are GLA and don't pay for hotels, training or any transportation. You are still throwing money away by having people on property and using resources and other people's time, only to give them the boot later on. It's at least a poor business model, but an operation with that bad of a reputation probably needs the "military" type school to ensure it will end up with "soldiers" who will get the job done.

It may seem like a waste to give people who really cannot cut it a bunch of wasted sim sessions, but Lakes (1) uses cheap level C sims run by low cost operators, and (2) tosses weak pilots out of those sims after only a few sessions. Most airlines use Level D sims such as those offered by Flight Safety, Simuflight, CAE etc. and while level C is still somewhat expensive to rent, probably more than a thousand per hour, it is an outdated machine using 80's technology with spotty online performance. But it is far less than the normal modern Level D sim costs per hour to lease. Last I heard there are only a couple of working Beech 1900 sims left in the world. Ground school only costs whatever they pay an underpaid FO to sit and click through a million powerpoint slides. I would venture a guess Lakes spends less than 3 grand on most washouts. As a business model it works fine as long is there is an abundant supply of pilots to pick through, which is exactly what they did until the supply suddenly dried up due to Colgan 3407 legislation.

Simuflite has 3 level C sims in the entire building.

I think they should go under. I'm not happy they found a way to skirt the 1,500 hr rule and undermine the general effort to improve safety and the general well being of pilots

Well, now that they just announced they are dropping out of Dickinson and Williston, it may not matter for very long. If there's nowhere left to fly the plane, doesn't make much difference how they find their pilots.

Aims Community College has a nice level-D sim that Lakes uses.

Incorrect. It is a level C.

All that for $16/hr!