RGB is superior to component and I tell you why.
RGB is a pure uncompressed format, so its free of any visual artifacts, and with quality cables, you have zero distortion.
There is a misnomer with higher resolutions. Higher Resolutions does not necessarily mean higher quality. Higher Resolution only supports for more detail.
Its why Laser Disc video still sells for $60 to $200 and up per disc because its a uncompressed video format (its why it the disk is size of a large vinyl record) that is in many ways superior to Blu ray even though Laser Disc came out in the late 70's and predate CDs.
If you are starting with 240p/ 480i resolution anyways, you aren't getting a better picture at 720 or 1080. If anything you run the risk of distortion and lost of quality.
1080p is only high quality when you get a clean 1080p picture. Or think of it this way SD source + HD display = Ugly SD image. You start to get noise and artifacts.
Reason RGB to YUV converters work so nicely is that, RGB is so free of flaws, any artifacts that might occur would be from the YUV converter or the LCD HD Display you are connecting it to.
Its also why Scan Line Generators are so recommended, it helps hide the unintentional ugly that the converter might spit out.
Its like a Photo copy, the copy is never a clear as the original.
So you would want the clearest purest source to copy from to keep your copy as best as it can be.
Because you aren't getting the original Image with most converters, you are getting a "copy".
The workaround is to start with a pure, uncompressed, zero interference image, hence RGB. RGB can be pipe directly to a RGB compatible CRT TV or Monitor, or it can be sent to a external video processor where the image is either upscaled or even better a line doubler, which is then displayed as a nice crisp 480 picture.
"With a good encoder in between, RGB and component look the same".
Yes with a good converter you never notice the difference, not just in image quality but also in zero image lag.
But not everyone gets a decent converter, some people "cheap out".