I agree with you that some schools in China entice more foreign teachers than they actually need to come here to teach, usually initially with L visas, and then weed them out! They tend to be training centres and private schools. One way to avoid this dishonest practice being perpetrated on yourself is to use an agent to find you a job. Not any agent,though, but an agent who charges a one-off introduction fee and is quite happy to give you and the employer each others' contact details before you are asked to sign up. The agent will ask your employer for his introduction fee as soon as you're ensconced.
What you said about good jobs paying less has been going on here for a few years now. Employers have been taking advantage of the excess supply situation in some of the more desirable cities in the eyes of foreign jobseekers. However, in the less desirable backwaters of China, the foreigner still has the upper hand when it comes to salary negotiations.
To avoid being caught up in a dog-eat-dog situation with your fellow foreign teachers, as described initially above, my suggestion is to avoid all training centers and private schools, and use a reputable agent to find you a job at a public educational institution instead. As for salary, I'm happy with 4500 Yuan upwards for 16 lessons a week at a university/college located in a backwater, or 5000 Yuan upwards for around 20 lessons a week at a senior middle school in a backwater. I don't need pressure or stress, and I have asked myself why I can't be content with my salary when my Chinese colleagues are on 2000 Yuan a month! They can live off their salaries. I'm earning at least double, so I should be able to live well. I can do so, not a problem at all. Not a bad deal for what is basically a parttime job!