I've had a lot of transfer students from other teachers over the years, and I see the results of guitar teacher laziness. There are obvious issues, such as poor documentation and poor organization (a bunch of tabs in a dog-eared stack of paper is all you have to show for two years and $2,000). However, there are some things that actually seem like selling points but are really further indications of a lack of a strong teaching foundation. Here are a few:
1) Your teacher stays up all night creating detailed tabs for you - When a guitar teacher creates a custom, detailed tab for you, that benefits your teacher as much or more than it benefits you. There's nothing wrong with having a "reach" song that you're working on, and it's awesome if your teacher creates a custom tab from time to time. That said, you should also be playing easier songs that you have a shot at figuring out on your own. if all you're doing is learning from tabs, you are learning to play songs, but not necessarily learning how to play the guitar.
2) Your teacher never puts down the guitar - Playing together with your teacher can be very beneficial for students at all levels. However, a teacher who never puts down the guitar to let you play alone may be hampering your ability to play independently, especially at the beginner level.
3) Jaw-dropping displays of guitar prowess are a part of every lesson - Your lessons should be about you, not about your teacher. If you feel intimidated or in awe of your teacher, you might not feel comfortable asking questions or showing that you are having trouble with something. It's great to know that you're studying with a person who has some serious chops, but beware of show-offy noodling or demonstration of skills that supposedly "can't be taught."
4) Your teacher lets you learn whatever you want - It's great for a teacher to help you learn songs that you love - that's the whole point. However, your teacher should also challenge you with material that will develop your ear, encourage your ability to read, or help you learn specific technical skills. Also (especially relevant to younger students) your teacher can help broaden your horizons by sharing music that you might enjoy, based on what you're already expressing interest in.
5) Your teacher keeps you in your comfort zone - There are many guitarists who are stuck. They tend to have students who are stuck. If you have been playing for a year or more and still can't play a song all the way through, have never jammed with anyone but your teacher, and don't feel a sense of identity as a guitarist, it's time to re-evaluate. A good teacher will hold you accountable for not only daily practice but actual mastery, and will help you set and reach appropriate goals.
Have you had any of these experiences in learning guitar or any other instrument?