@Dobbersky I dont think you are too hard on your students at all, rather create quality over quantity. I have seen HUNDREDS of so called black belts, who are pathetic, katas sloppy, bunkais pathetic, just a sloppy way of fighting etc. That makes themselves, the instructor and the whole style of karate/fighting look pathetic. It takes one bad apple to ruin a batch.
@hope you have to remember, that these people are doing a karate STYLE, so its a WAY how things MUST be, because its symmetrically worked out. You punch in a certain way, because its most effective, you stand with your feet in a specific way because it gives you a studier grip on the ground etc. If they want their own "look/way" of fighting, then they shouldnt do a fighting discipline like karate, but MMA instead.
So what im saying is, rather let them stay put for a while, and maybe let them do the additional training with you for the next few months (until it becomes habit for them too), and when they do their grading, they dont just pass it, they ACE it