The lack of highly competitive private schools is actually a huge problem in Orange County. As someone who attended both as a child, and lives in an area with some of the best public schools in Silicon Valley yet chooses to send their kids to private schools, I can offer some perspective.
First, Newport schools aren't that great,especially as you hit high school. Why? What is the common denominator in any area of CA with excellent public schools? High Asian population. Not much in Newport. I don't see CdM and NH sending more kids to UCB/Stanford/Ivies (or even for that matter USC which today is much more competitive than 10 yrs ago) than Uni or Troy High (for OC schools). In other words, no one moves to Newport for the schools - its the prestige of the address. On the opposite side, foreigners buy property in Turtle Rock or San Marino or Cupertino or Saratoga or Palo Alto just for the schools.
Second, anyone with high achieving children will tell you the angst they feel when they making the decision over public/private. Private schools will always offer more upside to the academically gifted child. Public schools are fine for normal kids, but high achievers risk being bored (which can manifest into behavior issues at the lower grade levels) in a public school environment. In fact, my wife and I view public school as an option to let our child more easily dominate academically as compared to the exclusive private schools,which is also a factor that colleges look at.
Third, OC lacks great private schools, and also a world class university to drive those priavte school kids to. In L.A. you have Pasadena Polytechnic (across from CalTech), Harvard Westlake, Brentwood School, Webb in Claremont, Flintridge Prep. Westridge, Mayfield, Loyola etc etc etc. OC has mainly Catholic schools more known for sports than academic prowess. Uni and Troy are the most rigorous high schools in OC. I can't think of another major metro area where this is the case.
Up here in the Bay area, we are blessed with a plethora of private schools. I think this is driven by the high achieveing entrepreneurial nature of this area, and the fact that the entire high tech industry was borne out of Stanford, the one school that everyone up here aspires for their children. A school like Harker will funnel them directly in - at a cost of $35K/yr starting at Kindergarten. Of course, up here people have the money and place the importance on education so this school has an annual waiting list. Many others like it, along with the Catholic schools.
In OC, I would agree that it is better to look for excellent public schools as the best are a better option than the limited private school choices that exist there.