It isn't that a CWI cannot write a WPS, it simply that it isn't an expectation that he is able to write a WPS. Some CWIs have the experience and training needed to write a WPS, but it isn't a given that just because an individual has the CWI certification in his back pocket he has the necessary expertise to do so.
I didn't say the Level III has to oversee day to day in-house NDT. I said it is best if there is an on-going relationship between the vendor providing outside services, i.e., Level III service, to ensure the NDT is being performed properly, procedures haven't been modified without proper review and approval, etc.
Considering the various functions that should be handled by the Level III, if the system is functioning properly, the relationship should be on-going rather than a mail-order or a once-in-a-lifetime purchase. The Level III needs to be familiar with the client's product line, methods of manufacturing, and applicable standards if the procedures and services delivered are to be more than "boiler plate" window dressings.
As for an expired CWI, there are many jobs that can be performed by individuals that are not CWI. Even AWS welding standards do not require the visual inspections to be performed by a CWI. That requirement is typically a customer imposed stipulation.
Best regards - Al