Preparatory schools: What makes them better?

So, I've been reading about prep schools, especially the high-end ones like Upper Canada, Exeter, Eton, etc. and I've got a few questions.

1. What makes them better? Other than the people and the connections, is there a difference in course content? I get that there's fewer students, so there's a better teacher-student ratio, but other than that?

2. In a relatively unregulated system like the US, or in a system where there's a high disparity between rich and poor like the UK, I would understand how a prep school could be better. What about highly regulated systems, though, such as the ones in Canada? Math 12 or English 12 in BC have very well-defined goals and curricula. As well, the teachers who teach at public schools are unionized and well-paid - moreso than private school teachers. How does a private school compete in that scenario?