Here are my thoughts on how to deal with the issue of how to maintain/maximize your tango enjoyment (without appearing to be a snob). The only possible solution I see, is to talk to some of the people in your community.Here's a conumdrum....
First, I'd find out how other followers feel about the people in question. Do other followers feel the same as you about them, or are they OK in dancing with them? If it's only you, there is probably no solution.
Second, I'd talk to the person who is about to go on your no fly list. Depending on how good your relationship is, explain what your issue is with him. I would suggest offering a free private lesson (or two) to help him with whatever the issue is, that is causing the problem.
I also have some (possibly radical) advice about another issue in your post, how to maintain/maximize your teaching business. It is, give the customer what he wants. Teach them the "fancy" steps, rather than forcing them to go to someone else who will (and likely not as well). They got worse when they went elsewhere, so what have you got to lose? You can still work on fundamentals while teaching the fancy steps.
I know this isn't the party line, but I think it's the best you can do with some people (BTW, I was one of those people, so I know first hand). I eventually changed my focus, and got better at fundamentals (even if I still have a long ways to go). Possibly some of these people there will too, once they've been exposed to the other steps that interest them.