I'm
that MuswellHillDad (on p1) thinks that it is simple to teach people right from wrong, and that experience and tolerance will just make the difference clear.
On the contrary, any serious moralist will tell you that knowing right from wrong can often be difficult and complicated. One thing that RE can do, if it taught well, can be to how different deep ideas about right and wrong can have very different consequences in the real world.
Take the 'trolley problem', which asks you to imagine that you are driving a train full of passengers which is approaching a junction. On one fork of the junction a person is tied to the line. The other runs over a cliff. What should you do, given that you can't stop the train?
Do you believe that what is right and wrong depends entirely on the situation, and that there aren't any absolute standards? Do you believe that right and wrong are subject to means and ends (the end, or right, justifies the means used to achieve it)? Do you believe that right and wrong are universal? Do you believe that right and wrong are illusions? All these different ideas (some associated with religious beliefs, some associated with atheist philosophers) will have different outcomes in terms of what you decide to do.
The complexity of such debates means that they have to be taught by skilled teachers. Like it or not, the world's religions have a longer and richer tradition of moral and metaphysical thinking than atheism, and were historically prior to atheism -- the idea that you can separate philosophy from religion would have been viewed as nonsensical for most of history.
Ofsted is saying that the teaching of this difficult important subject is not good enough, and that is what RE teachers have been saying for years.