Thanks everyone for the responses! It is helpful to be reminded of the value of group lessons. For me the primary benefits are getting used to riding around other horses, for both horse and rider, the social aspect and being inspired by watching other riders who are better than I am.
If I were in a position where I could only afford group lessons, I would still try to find the extra cash to pony up for 1 private lesson per month (+3 group/month). I have found I learn much more and improve at a much fast rate with private. While I agree you can learn from watching others, so much of riding is muscle memory and building fast reactions which only comes from time you spend riding, not watching.