Some of your comments are accurate and some are not. I DO NOT go to school down in the Caribbean and wouldn't want to go there unless I absolutely have to. I'm premed, but anyway I know quite a bit (okay, a lot) about the Caribbean med schools.
In a way, Caribbean schools do attract "failed premeds." They are known for giving these "failed premeds" another chance. Yes, they are easier to get into. But don't dismiss these failed premeds as people who did not have the ability to make it.
My brother went to school in a top tier national university. He finished with an upward trend (4.0 his last semester), but the damage had already been done to his cumulative gpa and bcpm. He scored a 30 (10 on all sections) on his first try on the MCAT. He did not get accepted in his first application cycle due to his below-average GPA. However, he was accepted to every SMP program he applied to--Georgetown, Boston University, and Drexel. He was also accepted to three Caribbean schools, known as the big three (St George's University, American University of the Caribbean, and Ross University). He decided he could either spend the extra year or two doing a post-bacc (and maybe a glide year as well) which wouldn't necessarily get him accepted or he could start immediately at a foreign medical school. The two years he would spend in the Caribbean would be the same amount of time doing a 1-year post bacc with a glide year. Personally, I would have taken the risk with a post bacc, because I have an ego and I would at least want to try to go to my dream school. He on the other hand sucked up his pride and decided to get on with his life. I respect his decision and know he will succeed. You may be wondering how this "failed premed" is doing now.
He's finished two terms at SGU. He's finished such difficult classes as Gross Anatomy, Physiology, Neuro, Histology, etc. (just like the US first-years) His GPA? 4.0. If that's what you consider a failed premed then yeah, he's a failed premed. He uses the same books used in many US schools. He studies with the Lippincott books and the Board Review Series. But I don't know...maybe the basic science content magically changes when it gets shipped overseas...Is he really that inferior to US med students just because they're in the US and he's abroad?
Don't be so quick to assume that Caribbean students are just a bunch of no-good rejects without potential or ability. Many of them WOULD have been accepted to US med schools with another year of two of postgraduate studies in the US.
You may be wondering about the quality of education. Well let's put it this way. A LOT of the schools in the Caribbean are purely trying to take advantage of failed US premeds. A lot of them DO NOT have licensure in all 50 states. Ross and American University of the Caribbean claim high pass rates on the boards, but MANY of their students fail out or "decel." They also have to pass "shelf exams" before they're even allowed to take the step 1. My brother's school, SGU, has many students that decel as well. But if you're a good student with a drive to succeed, you will. My brother knew he was ready for med school. If you're not sure if you're ready for the rigors of med school, don't take a crapshot and gamble on a year in the Caribbean. Basic science is basic science...period. Physiology and neuroanatomy don't become easier by going offshore.
Is the education as good in the Caribbean? Maybe, maybe not. But the same is true for many US schools. The teaching quality always varies no matter where you are. And as we all know, a lot of students learn on their own and don't even go to class...If you're trying to learn anything related to research, Caribbean schools suck. Don't go if that's your interest. On the other hand, since the teachers aren't doing any research, some of them are devoted to teaching their students to thoroughly understand the material. Some of them genuinely want their students to become excellent physicians.
Do the Caribbean schools cost more? Yes, the overall price is a crapload. Don't be surprised to spend a total of $50000 a year. But if you do a post bacc at a private school for a year of two, and then enter a private med school, you may well be be spending a comparable amount.
Competitive residencies: If you're going for something like dermatology, DO NOT go to the Caribbean. Your chances of winning the Powerball are probably better. Can you get into specialties like radiation oncology and ortho? If you're at the top of your class and score higher than 250s on the Step I and II and do a heck of a lot of electives in that area and make good connections, you have a SMALL chance, but it IS possible. Can you do careers other than primary care? Definitely. Check out the recent matchlists of the Big Three:
SGU:
http://www.sgu.edu/nhome.nsf/webcontent/b9065c6b72b621ed85256b68007047fe?OpenDocument&top=home
AUC:
http://www.aucmed.edu/05_rr.php
Ross:
http://www.rossmed.edu/Residency_Appts_/residency_appts_.html
As you can see, most Caribbean graduates DO go into primary care, but I think you can see from the matchlists above, that the good students succeed in matching with some very competitive (and even kick @$$) specialties.
Are they far less reputable? Yes, they are. But you know what? There's only two types of doctors as far as I'm concerned: good ones and bad ones. Does it matter if you're a DO or an MD? Are you a better doctor if you get into med school on the first try as opposed to being a reapplicant? Are you a better doctor if you graduate from Harvard than if you graduate from a foreign medical school? Let's not jump to hasty conclusions. The last thing we need in this world is more prejudice. More reputable schools should be better at preparing you for a career in medicine and should be better at getting you good residencies and clinical training, but ultimately it is the individual who decides his or her fate. Ultimately, it is the individual who must actually do the clinical training. Are you really going to tell me that a DO or foreign medical graduate (FMG) MD that trains at a place like Mayo or Yale isn't getting as good of training as a "top tier" US allopathic student? Get real. Medical schools serve to prepare you to perform well clinically. Your ability to be a good doctor will depend on how good your clinical training is and what you put into it. Medical school is simply there to prepare you for that training and your career.
"I'll just go to the Caribbean and then transfer." Don't bet on it. It's extremely hard to transfer back into the states. Even with a 4.0 GPA and a 250 on your Step I, it's a game of luck. Some schools wouldn't accept you with a 4.0 and a 260 on your Step I because they only accept students from LCME accredited schools. If you want to attempt a transfer, you should enter a Caribbean school in the JANUARY term. Entering in August will screw up the time schedule making it nearly impossible to transfer. It's a game of luck because you're essentially hoping that some of the first-years of US schools will drop out or decide that medicine isn't for them. Also, some of these schools require connections (e.g. your spouse goes to that school) or major circumstances.
I read that there are over 25000 residencies available each year in the United States. There are less than 17000 graduates from US medical schools. Where in the world do the other residencies come from? I'm not completely sure on those stats, but suffice to say that THOUSANDS of residencies are offered to FMGs every year. The US needs physicians. Period.
I'm not here to give you some biased infomercial. Make your own decision. But you should know the disadvantages of Caribbean medical school: (continued)
That was a truly thorough and fantastic post. 
