I'm an ERC student, and it was my first preference
The only reason can think why not to apply is simply that you'd have to live away from melbourne for 2 and a bit years of uni. Alot of people in medicine are concerned with prestige, and beleive an ERC based clinical education will be perceived as inferior to metropolitan. People also assume that bendigo and mildura are "crap" places to live.
This is mis-conception even held by students in the course, rural and metropolitan clinical students get the same marks, and do the same cirriculum.
An ERC spot gives you a unique opportunity to undertake a more hands on experience in a clinical environment. There is a lower student/teacher ratio, as about 60 kids in year 3 go off to the alfred, and about 18 to bendigo. Bendigo is a town of about 100,000 people with a large base hospital. I recently visited the mildura base hospital during our rural week and was shown the range of services to learn from there such as renal, chemotherapy and surgery.
The question of whether or not to choose ERC basically comes down to your attitude about medicine. Rural placements give one an insight into the real deficiences in healthcare, while metropolitan patients complain about waiting times, rural patients are waiting for doctors to actually move there and provide some sort of health service. The ERC scheme does not mean you are bonded, nor do you have any other post graduate obligations, you are free to apply for a metropolitan internship.
The ERC scheme brings an additional level to your education, it is not meant as a backup, if you won't enjoy it, don't apply for it, there are other people who will. There are some year one students who only had erc as a back-up and were hoping that there place got "upgraded". Once you take an ERC spot, you can't transfer schemes, you'll be in the ERC until you graduate.
In short, it's a great opportunity, not a back-up