In my personal option (that is, a more emotionally motivated option), I feel this idea of paying to do an internship, or even not being paid for an internship is wrong. It just helps create a wedge between the haves and the have nots, and creates yet another a career and educational disadvantage for children from poorer backgrounds. At the same time, it gives those already with many advantages even more of an advantage. It's already a difficult time in which this generation in university carries a heavy financial burden in order to obtain an education.
And why it's personal for me: I didn't grow up with a family or in an environment that knew anything about internships and career development. After I worked my way to another country to obtain a master's degree, I started discovering that it was quite the norm that middle to upper class families paid for their children's housing so they could go and do internships for free in the summers. Those internships in that particular place were crucial for building experience and leading to future jobs through connections and experience. I, on the other hand, was fending for myself and needed to devote my time to work -- which was not directly related to my studies -- that could give me the maximum money so that I could pay my living expenses during term-time. It was a very clear disadvantage to me and it's had long-term consequences.
Unfortunately, in a society without much specialized vocational training, it may become harder to argue that certain industries should "invest" in young people -- by paying for them as interns -- to gain training that will later be valuable to the companies. At the same time, I've been disappointed to see how some people have personally gained and grown their business by having free labor through unpaid interns. But what those interns gain in terms of skills is all quite vague.
It's good if you can and do pay them something so they are not living off their savings and that the experience is not causing a financial burden to them. That gives you the freedom to select the best candidates regardless of their socio-economic backgrounds.
Again, in my opinion, this kind of competitiveness is yet another sign of the times that we're living in an over-populated, over-connected world.
PS -- would you like me as your intern? I'm unemployed.