Chinese factory owners don't buy directly from the temples, they use a middle man as you'll find that all temples have contracts that only supply certain individuals. You can't buy direct from the temples without going through them, it's not possible. I don't know if it is legal or illegal, I just know you cannot buy direct from a temple.
I have to disagree and agree about it been ethical, in a sense depending on the temple then yes it is ethical as some temples do actually put the money back into the community and I can say this with 100% certainty, however some don't. I would also say it isn't ethical in the sense that they do donate the hair, however they actually have to pay to do this, yes it is only a small amount that covers the cost of the blades but isn't ethical in the sense that they themselves aren't making money from donating/selling their hair.
I would say other origins of hair are more ethical as the person actually gets paid for selling their hair which can actually do some good for their families etc.
As a company, we would never sell hair that we couldn't say with 100% certainty was ethical, we do our research and visit the source through to manufacturing.