My wife did both on our last trip.
She got different things out of each. Keep in mind in her case, the group lesson (mid week, not peak season) consisted of 1 other person, and the fact that my wife was better than the other lady, helped her build some confidence.
Private lesson was great too.
Ultimately, I've found my wife enjoys lessons because she knows she is being led by someone who knows the mountain well and will keep her out of stuff that's over her head. I've made the mistakes of making a wrong turn or two and leading her to much too tough terrain, so I have no credibility and she has no trust.
Lessons are best for both of us. Let's me get my legs burned out skiing alone so that I can/will happily ski with my wife in the afternoons, after she's had some instruction and is feeling good and confident about her abilities. I let her take me to the new stashes she's been shown.
I'm a big fan of 1/2 day lessons for my wife AND kids.
But ultimately, like you said, it all depends on the instructor.