1. New schools are being built and they aren't cheaper. Quinnipiac University is the newest medical school to open (accepted its first class in 2013) and it is just as expensive as any other private medical school.
See: http://www.quinnipiac.edu/academics/colleges-schools-and-dep...
2. Inflated education costs are the result of easy access to loan money that is not dischargeable. Most university education cost increases follow from this. I'd argue we should make schools hold the loans for their graduates at the bare minimum, and then allow them to be discharged in bankruptcy again.
Or, even more radically, I'd argue we should make medical education free, but require tuition for residency. That way, if you want to specialize, you owe more years of tuition, but supposedly will make more money later and can pay it off. This way, you actually have a strong incentive for people to consider primary care specialties, as it will lead to a much lower total-loan-burden.
Or even more radically, let's lop off a year of residency for the primary care specialties. Canada seems to do fine with GPs only completing a 2 year residency. That's gaining a whole year of attending earning power. That could be huge.
I do not see medical education costs responding to general market forces so long as educational debt is easy to obtain.
3. Again, American medical school operates typically as a 2 + 2 system, where the first two years are spent heavily in class learning the basic science of medicine and the last two years are spent clinically learning the fundamentals of history taking, physical exam, differential diagnosis, and medical decision making.
The premedical requirements actually are useful for establishing a common foundation of knowledge which allow for us to only need 2 years to cover all the pre-clinical coursework. If you lop that off, you will simply transition to the non-US systems of medical training, which are only 1-2 years shorter in total duration. Mexico has a 6 year system. Chile is 7 years. UK grad entry is 4 years + 2 foundational years + residency, so at minimum 6 years before residency begins. Fine, there's some cost-savings in 2 years of undergrad removed, but most undergrad tuition is cheaper than medical school tuition. I think there will be no net savings.
4. Again, you are fundamentally misunderstanding things. The AAMC has no supply controls. They can only control how many students a medical school has. They have zero say in the amount of residency spots. Those are created by hospitals and accredited by the ACGME. Most hospitals only create as many spots as they receive CMS funding for. They could create spots and fund them themselves, provided they meet the minimum standards set by the ACGME for each trainee (sufficient case volume and teaching). If the government were to stop paying for GME funding in 10 years, either the hospitals would start paying or they would begin charging tuition, but in EITHER CASE, you've got to create quality residencies to train people. You can't just open a residency at random hospital because you want to.