I probably won't get this exactly correct here,
@Brett but changes to the tax code (2015 - I think) made it much more costly for school districts to employ substitute teachers because the district had to incur more costs with respect to substitute teachers. Essentially, the district had to provide the same benefits and incur the same costs for substitute teachers as they would for every day employees. The result of that tax change gave reason for temporary agencies to enter the field (providing substitute teachers) because school districts were not going to incur these costs.
Think of it this way - if (somehow) a school district could operate using a very small number of substitute teachers, it might then make sense for the district to bear the extra costs since they would have (more) direct control with respect to assigning the substitute teacher(s) as needed. But substitute teacher demand is rarely predictable and there are days a school district may need NO subs then followed by a day where a dozen or more was needed.
Under the tax law change, the cost to a district was much larger for each sub
if the school hired the sub. By contracting with a temp service, schools could theorteically have access to as many subs as they needed
without incurring the benefit costs or tax obligation(s). The down side (as you might guess) is when school demand is more than the temp service can provide.
Also, these temp services are unlikely to only provide service to one school so their assets may be available to multiple schools. The temp service is a business after all so this makes sense, but in our experience it has been common for sub requests to the temp service to go unfilled because the temp service just does not have enough substitutes. Then what does a school do?
As to your first point, substitute teachers are not paid well but prior to the tax change, most school districts were able to keep a dedicated pool of substitutes happy because they kept the substitute busy with one school district. But in all fairness, the substitute teaching requirements vary wildly from state to state. You'd be shocked at how little is required to be a substitute teacher in some states.
Edit: I believe the following is still correct though some districts do have higher standards:
The Arkansas Department of Education defines a substitute teacher as an individual who does not hold an Arkansas teaching license but is employed by a local school district to provide classroom teaching services on an occasional and/or temporary basis. The following documentation is required by...
certificationmap.com