Most independent instructors that I know are the people who couldn't make it in a studio. There are some wonderful independents but there are some awful ones too. The only way to find out is to ask around or try for yourself. If you derive from your dancing the benefits that you desire then you will continue to buy dance lessons, if you don't then you won't. And as for being qualified, the chains require their teachers to be certified and trained.
Independent instructors have no such requirement.
Some studios in the area have a reputation for isolating their students from other dancers. That's a promising sign. Arthur Murray studios are all independantly owned so will vary as widely as any independant studios or teachers do for that matter. I'm certainly proud of the studio that I am associated with, I've been teaching there for about seven years now. I agree that the contracts are things to watch out for, but, for instance, the Arthur Murray I attend the 'contract' they use is completely non-binding for the customer.