This teaching restriction is based on a commercial perspective of controlling who sells what to whom. The requirements to become a certified KM or any other "1st level Instructor" are realatively low on the grand scale. There is a balance between perpetuating the program and keeping it organized and profitable for the main office.

That's just the way it works. Royce Gracie does a similar thing with his week long LE Instructor program, except he just expires their instructor status after six months if they don't attend another seminar.