Chelsea make a lot of their money from this. Snap up "promising" youngsters and post them around Europe for 3-4 years and then sell them on without playing a game for them. Chelsea have at least 27 players out on loan at the moment (some young, some not).
While your point is valid, it is all about perspective. I suspect the player's "owners" see it as doing the loaning club a favour by letting them use "their player" and not forcing them to have to buy the player outright. They hold all the cards (including the player's registration
).
If the reserve leagues were any good, I suspect fewer clubs would consider sending their players out on loan.