With an RTO supplying a registered Diploma course you know what you are getting has been audited and accredited with the goverment body's responsible for assessing and evaluating a training course and organisation.
With a local flight school you're getting, well, a local flight school that could be doing anything they want as far as training is concerned, as long as it fits in the casa regs. The regs. are aimed at safety (a noble cause), not training.