Such little regulation? What about Common Core, and the long history of ineffective state mandates to "improve" the education system? The education system is highly regulated, and nearly entirely state-run (not counting those few who are able to afford private school tuition on top of school taxes or the time to homeschool). Many, if not most, schools in the U.S. resemble prisons. Top-down. Hierarchical. Rigid. Compulsory.
And if you look at the history of the state education system, it was largely modeled after the Prussian education system, set up by the king, which "attempted to instill social obedience in the citizens through indoctrination [...] The purpose of the system was to instill loyalty to the Crown and to train young men for the military and the bureaucracy." [1] And I would argue that the school system serves a similar function today.
Based on the goals of social obedience and instilling loyalty to the state... Well, I think in those terms our education system is doing quite well.
[1] http://en.wikipedia.org/wiki/Prussian_education_system