I might be misreading your comments. What about those starter sets make them bad? Is it stopping at level 3? Not explaining the game well enough?
1. Most starter sets are made for people who have already played RPGs. It can be self evident in how many of them are written and made.
They go over the rules and then dump and adventure on you. This can work for someone who's played before, but for someone who has no idea what it is or what they are doing...this is not ideal.
For someone learning how to play an RPG there is no real introduction to how it works or what they are doing. At that point they may as well just buy the actual rulebooks. Sometimes the actual rulebooks (for example, the 5e PHB currently is probably better than the starter set rules were!) have better explanations than the abriged rules for the starter set!
Paizo (and at least the Mentzer Red Box) has a type of choose your own adventure and other explanations as it goes through how this stuff works. Painful for someone who knows what they are doing, but probably essential for someone who's never played before.
2. Let's say they actually figure out what they are doing because they are intelligent kids, can youtube, and other things. Now they start the starter set. They can't actually do some of what they saw from the videos with creating a character. They can't see the different combinations. They are stuck with whatever characters the box gives them. They have one adventure, and a small set of pre-made characters.
They would get better value buying a board game! Or perhaps if they splurged a little more, though just as much as a PHB, better value for D&D by buying one of the D&D boardgames (such as Ravenloft or Ashardalon)!.
Those D&D boardgames may only get you a session of a game and characters can only go up to level 2, but those premade characters have more adventures and more sessions than most Starter Sets have!
They get far more replayability from a Boardgame than they do from the Starter Set.
3. The idea is to win over new players. For experienced players, a starter set may give them an idea of how the rules are. It's a taste and that may work.
For beginner players, they need to be able to see some use from this. They may only use these rules, or they may get interested and want more.
The only good thing I found in the original 5e Starter Set was that it also included links and ways for them to get the Basic rules online, which gave that replayability.
Many (think back on when you started) that actually get into RPGs don't go full head on into them. They either start with a good beginner set or ignore that and actually just start with the real rulebooks (or for D&D, the core 3). They play with those rules for a while (normally a lot longer than what a starter set gives you) and as they get more involved, they get more interested in the game until finally, they start looking at more options (and it's the options that normally people are wanting that gets them to start buying more. The Basic game of the Red box that so many talk about eventually got them to buy the AD&D PHB. That led to many a blended game of Basic rules and AD&D classes...etc). If they got the corebooks, many stick with those for years, until they see that they can get more options from other books (either campaignwise, or more class options, or more monsters...etc).
Starter sets don't give new players enough time or options....IMO.
When your planned audience are already experienced RPG players, than sure, a starter set is fine. It gives them a taste of the game and what to expect. For new players, most of the starter sets out there are disasters (IMO).
The Paizo Starter set for PF1e was perhaps one of the best Sets out there for new players. The D&D starter set with the Basic Rules was okay, but ONLY with the Basic Rules and they weren't printed out and did not come with the Starter Set. The Essentials Kit combined with the Starter Set was a better option and clicked two out of the three things needed (from above), but with how much you were paying you probably could have simply gotten the PHB already.
Hopefully this lengthy explanation gives out my reasons for my statement.
Edit PS: The new Starter Set coming out later this year has me hopeful they may have a decent one coming, but I won't know until I actually see how it actually works when completed.
