I think there's problems with that narrative too. The impact that good teachers can have on kids from very troubled homes is probably overstated, and teachers unions have often been fighting against performance rating systems that unfairly ignore that. But in defense of charters, a performance rating system that doesn't work won't survive very long in the private sector.
Edit: Perhaps a better question, that avoids the nasty politics of the current situation, is: what does the ideal system look like? My inclination is that it would look more like charter schools than like public schools.
The precise policy details might not apply in extremely different societies/political systems, but the high-level goals should be the same:
Highly qualified professional teachers with good career prospects and lots of personal responsibility and a culture of continuous professional development, adequate school infrastructure and materials, focus on the individual needs of diverse children, resource equality for students regardless of wealth or social class, work to solve child poverty and other severe social problems that prevent any education system from functioning.
http://www.theatlantic.com/national/archive/2011/12/what-ame...
"...teachers are trained to assess children in classrooms using independent tests they create themselves. "
"All children receive a report card at the end of each semester, but these reports are based on individualized grading by each teacher."
"If a teacher is bad, it is the principal's responsibility to notice and deal with it."
"In Finland parents can also choose."
But it may be that the finnish model is slipping anyway:
http://blogs.spectator.co.uk/2013/06/is-finland-a-choice-les...
"Finnish eighth-graders today perform slightly lower than seventh-graders did in 1999."
I give them two decades.
Some charter schools. A minority. Others are run like tiny military academies, or have gone all-in on high-stakes testing, or profit by relying on low-paid short-term teachers with high turnover, or are mainly financial schemes/scams with schools attached (cf. the alternet link a few posts upthread).
All of the bits you listed actually sound precisely like my southern California suburban public elementary school experience in the mid–late 1990s. Unfortunately the school got constant pushback from the school district and state for not being excited enough about letter grades or standardized tests, but was able to mostly persist its culture through support from local parents.
The hard work, mediocre pay compared to alternative professions, and lack of autonomy and social respect they receive takes its toll though, and teacher attrition is higher than ever. Instead of “playing chicken” as you suggest, experienced teachers are retiring in droves and top potential teachers are scared away by poor career prospects, and as a profession teaching is hollowing out. Most states cut education budgets sharply after the 2008 recession and in general those budgets still haven’t recovered. I fear that in another decade or two public education will be in a very tough place, having lost a huge proportion of its human capital with no easy way to get it back. In parts of the US this is already a crisis, but the political response has been to further demonize teachers and push for more standardized testing, voucher programs, charter schools, and so on.
Even if states cut education budgets sharply in 2008 it shouldn't have been a problem, because it's not like teachers 30 years before that were suffering under much more parsimonious spending. It's just that when they cut those budgets, someone decided to pass the pain on to the teachers instead of figuring out where the real waste was.
The atrocious thing is that the teacher's unions keep clamoring for more educational spending instead of higher teacher pay. Empirically speaking in the US, more educational spending will correlate with lower teacher pay.
Jurisdictions are moving toward charter schools because their teachers are not unionized, and can therefore be paid less salary and benefits than public school teachers, with the side “benefit” of breaking public schoolteachers unions. Additionally, charter schools help rich white people redirect their tax money away from funding public schools in poor brown neighborhoods. Finally, charter schools are much less regulated w/r/t the salaries they pay their management or the services they purchase from other firms, which makes them a booming profit center, and gives plenty of slush to spend on lobbying, bribes, and PR/marketing.
Alternet isn’t the most neutral source, but check out this lengthy piece for a decent rundown of some of the sources of profit in the charter school world: http://www.alternet.org/election-2014/who-profiting-charters...