Yeah, this was also the message of the excellent documentary "Mad Hot Ballroom" http://www.paramountclassics.com/madhot/ which put me in an upbeat mood (a rare thing nowadays) for several days (part of it was that it was quintessential New York City, which I think should secede from the United States).
But OTOH the opponents, many of who are minority parents who actually care about their children's education, say that "blended" schools discourage children who actually want to learn if the dysfunctionality becomes the norm in the school. Such parents are a strong force for publicly funded charter schools, because they see it as a way to separate their kids form the bad influence of "blended" schools.
I guess it is one thing when you blend a few disadvantaged kids with "regular" kids and thus create a positive role model for them, especially when you avoid ostracizing them. But its is a very different thing when you put a few motivated kids into a school where delinquency is the norm, and thus create a situation in which those who actually want to learn are ostracized by their peers. I saw the latter a lot when my kid was in high school.
I think that this whole school debate (blended vs, separate, public vs. charter) misses one important point - that the schools are asked to do the task they were never designed to do - solve broader social problems affecting the kids (poverty, segregation, lack of parental supervision, crime, substance abuse, dysfunctional values, etc.) - and they blamed if they failed to solve those problems. It is like sending paramedics equipped with first aid kids to fight AIDS and then blaming them for failing to save their patients.
Some time ago I attended a presentation by two Hopkins researchers who showed that differences in academic achievement of school children are attributable not to the quality of school instruction but the influence of their social environment (mainly during the summer vacation). This suggests that the proper way to improve academic performance of school children is not "school reform" but social reform that eliminates these negative influences.
Wojtek