I think it's a bit of a horses for courses. There is a baseline theoretical knowledge any pilot should be taught. If I had a student who say in his/her late 40's early 50's - the "I have always wanted to fly - know I have the time and money I have decided I want to learn" I would perhaps not go into quite so much depth on the theoretical side of things as I would with the 18 year old who is doing his/her PPL as the first step towards a career as a commercial pilot.
The long brief on principles of flight should cover basically how lift is produced and to give the student a good understanding of the lift equation. The student certainly should understand the theory behind why slight back pressure is required on the controls during a turn and why stall speed increases in a turn. Trim drag however is not of great relevance to your average PPL. Speed control and stability is of great relevance.
Good Air Law is a must - the low hours PPL will not get prosecuted by the CAA for flying 100ft to high or low in the circuit pattern. He may well get in trouble if he or she takes a mate with them having not flown between October and March.
Some fellow Instructors and I had a discussion the other day about student solo in circuit - how far downwind can he be extended by ATC for spacing before it becomes a cross country flight for which said student has not been authorised.
It is both the aircraft and the law that bite ones a**e. Understand both!