mad_jock
Any reputable FTO will offer the student choice as to how much sim time to do. For example our headline rate for the CPL includes no sim time. We then have "plan B" with the more usual 5 hours FNPT1, and soon will be able to offer a third option with 10 hours FNPT2. It is entirely up to the student which option is taken. Most of the advantage you attribute to the school actually have more effect on the student. FTOs all charge more for the aircraft than sim to take these into account, it is the student who pays. The student should be able to structure the course as he or she sees fit within the requirements.
Of course for parts of the training a sim is better. It can more realistically simulate emergencies. At the start of the course some of the pressure can be taken off, so procedures can initially be practised with a convenient wind and no ATC nuissance, introducing these complications as a student progresses. Intelligent use of a realistic sim can be extremely helpful.
A simple sim, even RANT can be used very effectively for training. There comes a point, though, when a decent FNPT2 standard of sim is essential to take into account the very points you mention, such as weather.
On the marketing side I think most pilots prefer to see real aircraft. Few of them have an obsession with simulator flying!
Sim time does count towards your total time, for example a certain amount of sim time is allowed when calculating 1500 hours for a full ATPL.
Linda
I have had complaints from WWW when I deliberately have not mentioned my employer so as to avoid accusations of advertising. He insisted I mention my employer to give warning I may be biased. This time WWW has decided the opposite, and I have amended my post to comply. Of course since it is easy to find out who each of us work for from the profile, it seems to me an inconsequential point.