THE CERTIFICATED FLIGHT INSTRUCTOR AND A PRIVATE PILOT/COMMERCIAL STUDENT, WERE ON A DUAL INSTRUCTIONAL FLIGHT IN A HELICOPTER, TO PRACTICE PINNACLE APPROACHES, LANDINGS, AND TAKEOFFS. THE AREA OF LANDING WAS LOCATED AT ABOUT 3,600 FEET MSL, NEAR THE TOP OF A STEEP MOUNTAIN RIDGE. TWO APPROACHES TO THE PINNACLE LANDING ZONE RESULTED IN ONE GO-AROUND, AND ONE LANDING. THE INSTRUCTOR PILOT REPORTED THAT THE STUDENT TENDED TO ALLOW THE MAIN ROTOR RPM TO DROOP WHEN ADDING POWER TO TERMINATE THE LANDING APPROACH. ON THE THIRD APPROACH, THE RPM AGAIN STARTED TO DECREASE. THE INSTRUCTOR PILOT TOOK CONTROL OF THE HELICOPTER AND ATTEMPTED TO INCREASE THE THROTTLE SETTING AND DECREASE COLLECTIVE PITCH TO RECOVER FROM THE LOW ROTOR RPM CONDITION. MAIN ROTOR RPM CONTINUED TO DECREASE AND THE INSTRUCTOR ATTEMPTED TO LAND AT THE EDGE OF THE RIDGE. THE HELICOPTER SLID BACKWARDS OVER THE EDGE OF THE MOUNTAIN AND BEGAN TO BREAK APART, TUMBLING 600 FEET DOWN THE MOUNTAIN SIDE. A POST CRASH FIRE ERUPTED DURING THE BREAK-UP SEQUENCE. THE INSTRUCTOR WAS EJECTED FROM HELICOPTER. THE STUDENT REMAINED IN THE WRECKAGE AND RECEIVED FATAL INJURIES. THE POST ACCIDENT WRECKAGE EXAMINATION DISCLOSED NO EVIDENCE OF ANY PREEXISTING MECHANICAL FAILURES OR MALFUNCTIONS.