@Diggler67 we have a similar option here for motorcyclists - there's a coursework option or a test option. As I understand it, the coursework option is meant to be the default for new riders, but if you already have the skills, you can challenge the exam directly to save fifty bucks and avoid burning a month's worth of Saturdays.
I would guess that the average test-qualified rider is safer overall, but mostly from selection bias: the experienced riders will go that route while most new riders will take the course. On the other hand, for someone who's never ridden before, it's possible to learn just enough to pass the test without picking up all the save-a-bad-situation skills you'd learn from the course, so among new riders those who are coursework-qualified may well be the safer.
@khird I think you're 100% right on the selection bias comment.
I think that many (most) of the driver's education-qualifying Class 5.0 drivers will be as safe or safer than the drivers who took a test with a replacement examiner without taking driver's education.
I think the downside is that a few of the driver's ed-qualifying drivers will be on the road when they are just plain dangerous. If they go back and re-test them (MPI "reserved the right" to do so), this risk is minimized.