I'm not sure why people are so stuck on the "they're still killing off disciples" thing. This is a pretty common theme in the shadier martial arts organizations in fiction. Would it be better to have more survivors even if they're just foot soldiers? Maybe. They don't care, because for whatever reason they feel this training method will result in even just a few more people at a level that could probably wipe out tons of foot soldiers on their own. If they can even exceed their original expectations for what they'd get out of this program (like they're suspecting with "900" now), they'd probably kill off all the rest of these guys to do so because that'd just mean someone who can wipe out even higher than foot soldiers in large numbers on their own.