The flight instructor reported that about 150 feet above the ground during the initial climb, he reduced the power to idle to demonstrate loss of engine power during takeoff. He further reported that he lowered the nose of the airplane to gain airspeed, but after about 2 seconds the airplane settled rapidly. The flight instructor advanced the throttle to full forward, and flared about 20 feet above the ground to arrest the sink rate. He reported that the airplane landed flat, all three landing gear collapsed, and the airplane skidded about 150 feet down the runway, which resulted in substantial damage to the left wing. According to the flight instructor there were no preimpact mechanical failures or malfunctions with the airframe or engine that would have precluded normal operation. A review of recorded data from the automated weather observation station located on the airport, revealed that, about 37 minutes before the accident the wind was 200 degrees true at 16 knots, wind gusts 23 knots. A further review revealed that, about 27 minutes after the accident the wind was 190 degrees true at 17 knots, wind gusts 27 knots. The airplane landed on runway 21R.