Lower costs. These are primarily small, local companies with low overhead, and no North American-style marketing budgets and salaries. As they have many European clients, they're also able to amortize their overhead costs over a larger customer base.
Knowledgeable staff and guides. You are helped by locals in the area, who know the area, and who can guide you, pointing out the gems on and off the beaten tourist track.
On-the-ground support. They're local, so you can simply reach out to them if any issues or questions arise.
International camaraderie. On group tours, your party is usually composed of people from all over the world. It's a wonderful way to make new friends around the globe. And on self-guided tours, you can choose (or choose not to) make friends with locals or other travelers.