Streaming is the best approach (IMO), as long as the schools are large enough or homogeneous enough (or have appropriate intercollegiate relationships with nearby schools) to make it happen. If you can't make a full class of pupils of whom you expect top grades, then the range of abilities can be a bit too big.
You ideally need to be able to promote and demote, which means having at least one subject teacher per stream per year, so that pupils can shift between streams without timetable changes, and having small enough class sizes that the teachers can all cope with a few more being added (as well as possibly doing a bit of extra coaching to get a promoted pupil up to the level of the rest of the class).
Selective schooling as a norm can write talented kids off at age 11 if their talents aren't broad enough. Streaming means that children can still excel in their best disciplines even if they are lacking in others.
I don't know about today, but this was how it was when I was in high school around 1990 in the US. We had "basic", "college prep" and "honors/advanced placement" levels, plus some kind of level for the special-ed kids. However, it was only at the high school level (4 years just prior to college); before that, in the earlier grades, everyone was mostly lumped together.
You break kids up by test score and then put all the top kids together, all the middle kids together, and all the bottom kids together. My public school experimented with it for one year, but reverted. Rumor was, parents felt like their kids were being written off in the 6th grade.
Is streaming out of fashion in state schools these days? I know its alive and well in public schools as my son was streamed.
Edit: For those outside the UK: public schools are a type of private school.