I will base my answer solely on my teaching experience, as native speaker versus non-native speaker teaching is not my area of research specialization. I will offer an answer to two questions: 1) Should we select teachers on the basis of their native speaker/ non-native speaker status?; 2) Why are native speaker teachers still the preferred choice in many learning environments?
1) Should we select teachers on the basis of their native speaker/ non-native speaker status?
In my view, it is not possible to state categorically that native speaker teachers are better per se than non-native speaker teachers or vice versa. It might be possible to state that native speaker teachers are generally better in certain teaching/learning environments and non-native speaking teachers in others. However, we should not allow such general, a priori beliefs to colour our judgements when selecting a teacher for a particular teaching/learning environment. For example, native speaker teachers may be thought to be better for teaching up-to-date colloquial English than most non-native teachers, while non-native speakers, because they were once students of the language themselves, might be considered better for explaining grammar and helping students to deal with semi-fossilized errors. However, when selecting staff for the colloquial language classes, we may find that there are some non-native teachers who have lived in an English speaking country recently, whose knowledge of current phrases and idioms is better than that of native speakers like myself, who have lived outside their country for too long. Likewise, we may find some native speaker teachers with a very good knowledge of the causes of learner error and an excellent grounding in grammar who could do as well as the best non-native speaker teacher in explaining grammar and treating error.
In sum, to avoid discrimination, we should forget the native-non native speaker distinction and look for teachers who are linguistically and pedagogically competent for the teaching situation in which they are to be employed. Unfortunately, we are a long way from this ideal situation, and,as Vadivel points out, non-native teachers are still discriminated against in many teaching/learning contexts.
2) Why are native speaker teachers still preferred in many teaching/learning environments?
As Rahimi notes, linguistic imperialism may indeed play an important role in the belief that native speaker teachers make better teachers of English as a second or foreign language. However, the belief that native speakers are better also exists in the teaching of non-hegemonical languages, so there must be other factors involved. In the past, with classes in which the teacher often acted as a linguistic model (e.g. teacher-led audiolingualism as opposed to the same method in operation in the language laboratory), the demand for native speaker teachers was more understandable: learners wanted to ensure that the language the teacher provided was pronounced in the most natural way possible and reflected as closely as possible the language spoken in the "source country". With the advent of other methods which emphasized the teacher's role as interaction facilitator and tended to rely on materials- books, audio materials etc-to provide an accurate up-to-date linguistic model, linguistically competent non-native speaker (NNS) teachers of English have become more widely accepted by the TEFL community. However, there is still a long way to go. Although many teaching certificates such as the CELTA are open to non-native teachers who can demonstrate a high level of English, it is still hard for NNS to find jobs as teachers in private language schools. Owners of language schools in Spain and the UK have told me that this is not due to their own prejudices, but to those of the students. Students and, in the case of younger students, parents prefer native speaker teachers. The teaching community should work together to overcome these prejudices by trying to convince learners, parents and ,when necessary, teachers themselves that non-native speaker teachers can be every bit as good as native speakers.