I think the question was what happens to the students who are not labeled as 'bright'? How does their being cast off to a "lower" school affect society in the long run.

I can think of a few reasons why we shouldn't optimize purely for the academic achievements of our most talented students: -Less excellent students tend to benefit from having more excellent students in their classes -Even if their academic outlooks are improved, the excellent students are segregated from having to learn how to deal with a wide range of intellectual levels and abilities -I'm not convinced it's really the most efficient way to allocate our educational resources, especially as there's pretty clear evidence that "excellence" in students is correlated to affluence, so we might really just be segregating by class anyway.

It reduces social mobility. Charles Murray talks about how there is a trade-off between social mobility and meritocracy due to the heredity of IQ.

In a meritocratic society, the smartest kids go to the best schools, then to the best colleges, then the most elite companies, then likely marry someone from school or work, and then have the smartest kids.

Socioeconomic classes become set due the stability of cognitive function across generations.

Is it ideal to have a cognitively and economically stratified america with a cognitive elite and cognitive under-class?

Is it ideal that this cognitive elite has little to no interaction with the rest of America, and little understanding of how the rest of the country lives?

Cognitive elite or financial elite. The rich get to send their kids to private schools. Smart poor kids get locked into mediocre public schools with reducing standards. Rich parents pass on their wealth at a lower tax rate.

Being smart is not a guarantee of success so we should make it harder so the less intelligent do not suffer any disadvantage.