You would forget that this would cause exponential growth: in a couple decades, a single lab could produce more people seeking tenure track than an entire country's worth of positions; there need to be smarter ways to provide the requisite labor for science, since this is clearly unsustainable praxis. Running a pyramid scheme of this magnitude is only going to cause an implosion—which we may already be witnessing.

That's a result of the funding model focused on small competitive grants. You could probably get at least as good research with a funding model that replaces every three PhD students with a student and a staff scientist. But then the society would have fewer PhDs overall, which would have unpredictable consequences.

Pretty good for the professor, not so good for the students.