You can absolutely do the Dip Ed while working - but you'd need flexibility from your workplace for the teaching placements.
With the ATAR-debate and quality of teachers, I think it's faulty to assume that people who scored highly in school will be better teachers.
Firstly, I've met many people who are brilliant in themselves, but unable to manage a classroom, communicate their knowledge, explain the basics in order for someone else to work their own way up to the teacher's knowledge, or figure out how to help someone learn who isn't as clever as they are.
Also, when you're teaching below VCE, the content really isn't that hard. Granted, at VCE level it can really help to know the material well, which is where a more academic teacher might come in handy. But! That's not going to be the same for all subjects. Does a highly-qualified Physics teacher need to have done well in every subject? Does an excellent artist and Art teacher need to have scored highly in more traditionally academic subjects? And teaching extends all the way down to 3yo kinder, too. I want a loving, supportive, patient and firm person teaching my hypothetical 3yo; I don't really care about their ATAR as long as they can read an analog clock and have received their 'pen licence'!
Lastly, I was surprised when I started teaching how much the success of the class depends on the coherence and energy of the class rather than the content. At the end of the day the teacher isn't the one sitting the exam - it's more about what the student can do than what the teacher knows. And being able to create an enthusiastic, hungry, inquisitive, high-achieving mindset across a group of 10-30 people is really difficult - and an ATAR doesn't help much with that.
You know, I worked in law before teaching, and the best lawyers I knew were often the ones with the low ATARs, who couldn't get into the prestigious unis. Since I got a good ATAR I should probably care about it more. I cared about it more when I got it, I guess!