"I know of a few businesses that build these internships into their model as a way of keeping costs down."
According to those regulations posted we see that a business can't legally have an unpaid intern to keep costs down. The pros for an unpaid intern would be; 'Intern gets experience,' and 'business has potential future employee.' Whereas the pros for a paid intern would be; 'Intern gets experience plus compensation,' and 'business gets profitable labor, and has potential future employee.'
You're absolutely right, but it's hard to enforce. I'm not saying it's right, but this kind of thing happens all the time in old media jobs and elsewhere. For example, if I brought you in as an intern and showed you how to write a story that's technically training, but your story may very well displace another reporter's story, too. Young workers live with it because they want to build portfolios and work experience.
According to those regulations posted we see that a business can't legally have an unpaid intern to keep costs down. The pros for an unpaid intern would be; 'Intern gets experience,' and 'business has potential future employee.' Whereas the pros for a paid intern would be; 'Intern gets experience plus compensation,' and 'business gets profitable labor, and has potential future employee.'