Man Josh, you being pretty hard on us shitty skiers! lol
Yeah. But... well, he's right you know...
Where there are ski-offs, if you talk to instructors about what level groups folks should be in, they judge by skills and balance and technique. If you talk to students about what group they think they should be in, they talk about terrain and run difficulty level. (And I've heard more than one instructor say they can often tell what level someone should be in just watching them stand around on their skis, without seeing a single turn.)
Many students want to practice or be guided on the terrain they find fun or engaging or challenging, rather than practice fundamentals on terrain they find "easy", to actually get better technically. I.e., something like "I ski black diamond bumps all the time, so I don't want a lesson on green groomers."
Finding the right balance between the two for students could be important, I'd think, because people want to get different things out of lessons. (At Taos, for instance, they ski you off, but they also ask what you like to ski or want to ski.)
I have a little bit of a reverse issue, where I look OK on groomers, but can't really ski, so I get placed at too high a level. I moved myself down a group at Taos a couple of weeks ago, because the group I was placed in was going to over-terrain me (IMO) and I wanted to work on more fundamental things and just start to get comfortable with harder terrain. Worked out great for me.