Earlier quoted context omitted.
Point 1 presents a false dichotomy. We can absolutely let kids move at different speeds while keeping them within the same school. And we can ensure that there are still shared classes and opportunities for students with different skills and abilities to interact. Frankly the tone of your comment troubles me. None of these students are more or less "deserving"; the goal is to help every student reach their potential.
Why is it the goal to help every student reach their potential? Who decided this, and what authority did they have to decide for us what the goal of all schools everywhere automatically must be? Also, you absolutely can't 'let' kids move at different speeds in the same school. You can let kids move at speeds where you enough kids at that speed. For a 90th percentile kid that is fine, there are roughly 10% of the stud…
Classes were tiered into ability, even at this age (I do not remember what the rubric was for deciding your tier) and for math classes I was pulled in to a self-study course along with 2 or 3 other students. There was no 'formal' class and instead the teacher would spend varying amounts of time with each student as they worked through the material on their own. Each student would work at his or her own pace.
I think this sort of system would do wonders for those both at the very top and at the very bottom. In college, I found office hours were somewhat similar in that students both behind and in front could get focused time with a professor to either catch up or advance even further ahead.
This is ignoring any budget and teacher constraints, but this seems like a real issue for both the 'top' and 'bottom' students.