If you've spent on average ~200K for medical school, how willing will you be to pay to work for 3 to 8 more years before you get a paycheck? Resident doctors already make less than nurses with 4 year undergraduate degrees.
The below article on how awful medicine and medical school are was written a decade ago and nothing has gotten better. People really like social status.
https://jakeseliger.com/2012/10/20/why-you-should-become-a-n...
Knowing these people, I also get the feeling that if pay were worse / debt was higher they would have pursued alternate careers. If your goal is to make more physicians you don't want to make the job less desirable. There are already paid residency positions that go unfilled every year (not because there arent enough students, but because the students dont want them). I don't know why you think people would pursue positions that they have to pay for.
To your other point on the intense competition: If half the people currently applying to medical school quit applying the quality of your average future doctor would drop.