On top of that, what are the standards for what the student does? I've seen some that say "meaningful legal experience." That really does not narrow it down much. I got a speeding ticket once and that was a meaningful legal experience. There is precious little meat on the bones of what is actualy required.
There is another factor that maybe bothers only me. The students pay essentially to work for others. This subsidization is not so worrisome when those others are public entities but when they are private, it is free labor for the purpose of generating a profit for others. This all becomes a bit fishy. Shouldn't the students in these cases be paid?
Now toss in the fact that in some places faculty are paid on the basis of how many externships they generate. Sounds like giving the faculty member a finder's fee or a cut of the school's take for selling credit to students.
I am not informed enough about the politics of the relations between the ABA, the AALS and law schools but, from this informed perspective it appears like a huge case of the AALS looking the other way because no one has the courage to really ask "What is going on." Or, perhaps they know exactly what is going on.