On the other hand, Finland is often touted as having a great educational system and they very explicitly do not segregate by ability, rather they try to lift all boats. The problem of "smart kids getting bored or not having opportunities to excel" somehow does not seem to be an issue (I am a bit confused that this is the case).

What happens when you get bad kids that don't care about their grades that distract the good kids and prevent them from learning. Ideally the teacher could bring them all up to the same pace, but at a certain point it's on the parent. In some cases you do need separation. I always enjoyed my GT (gifted and talented, separated classes from 1st grade to 8th) and AP (dual credit college/highschool 9-12th grade) classes more than others because they moved faster and my classmates were well behaved.

The schools weren't fully separated, the GT classes was one designated class (1st-5th was English, 6th-8th Science).

The AP classes were highschool and college credits and you could choose English, Math, and/or Science.

This was in Texas. Though they no longer do GT classes anymore I don't think. Those were my favorite as a kid though.

Yeah, I feel the same way from my personal experience as a kid, but from what I have read, the "bad kids" thesis you suggested is at least partially fallacious. Again, as an example, Finland seems to disprove it.

I don’t know if Finland as an example really proves or disproves anything. Finland is a small, homogeneous, and pretty unusual sort of country, and the fact that they happen to do well in certain standardised tests doesn’t mean that anything in particular they’re doing is optimised.

This.

Asian schools are great at providing high test scores. Their rigid education really drills the information into the kids and works well.

But that incredible strictness simply would not work with most American children. The culture is simply incompatible with the strict discipline involved (and that’s not to say it’s bad, but only different).

America’s trouble is that there are some majorly divided cultures living together, all under the label of “American”. What works for some people just won’t work for others.

Is it perhaps that the Asian parents can use physical discipline against their kids, whereas e.g. White parents wouldn't get away with that so easily?

I don’t think that’s it. At all.

Poorly performing students are often the ones who are “physically disciplined”. My most successful friends are generally the ones who had very supportive families who’d struggle to even raise their voices against someone.