My parents did something like this. My near-total isolation prior to college resulted in terrible social skills. I hurt a lot of people and experienced crushing loneliness. In my 30s, I'm starting to feel like I can pass as a "normal" person and have human relationships.

On the plus side I do still know a tremendous amount of trivia about topics that I was interested in as a child, I'm not particularly interested in following rules, and I'm not afraid to be alone or to learn things from a book without anyone to help. These qualities have served me in good stead.

On the balance, I'm not sure I would change anything, but you should be aware of what your kids might be in for.