Our Sensei acknowledges this guy has no fundamental grasp of basic movement and thinks he the student is too "good" to relearn the basics. Sensei does want him to learn our style better but understands this guy has issues.
I don't much admire the Marine Corps model, but I have to say it has its place. I think sometimes you really do have to smack people in the face--"You know NOTHING, everything you've done is worth NOTHING, you are starting over with the rank beginners"--to get them to pay attention. If they can't take that, there probably wasn't any way to reach them regardless.