While I think that would certainly deal a blow to their entire business model and academic practices, I think it's absolutely necessary to ensure proper education from the very beginning. Right now, Caribbean education is painted to be lax and not as stringent as the states. Which is true in certain aspects. So then, all PDs have to base their decision from that frame of mind and look at their exam scores and superficial qualities as the only deciding factor. Having a regulatory body would certainly be against the interest of a for-profit institution but it would remove the question of the illegitimacy of a Caribbean education. It would be properly certified and therefore raise no questions as to the quality of education or admissions requirements or anything of that nature.
For the people who are statistically likely to fail boards, there are things like SMPs or alternate careers in medicine. That is a whole other topic of conversation, on how undergraduate advisors and institutions should recommend these things to below average applicants. But I think overall, having a more strict oversight would improve the quality of education and sort of bring in the last unincorporated piece of the residency picture. (i.e. actual IMGs from Europe and beyond do not tend to come to the U.S. for practice, while Carib students do). The patterns of migration are there, and it seems like no one is doing anything about it.