I think the best solution is to have students learn at their own pace using MOOCs and supplement that with teachers in classrooms. I remember that I was way behind in classes until I hit 2nd or 3rd grade, and then our teachers allowed us to work through various workbooks at our own pace. Within a couple weeks I not only had caught up to my peers, but I was outstripping them at a very fast clip. I think that a lot of really smart kids probably have similar issues... the pace of lowest common denominator teaching which dominates both public and private classrooms can cause really bright kids to be frustrated and ultimately apathetic.
There is a social aspect to schooling that causes a lot of hangups with both teachers and parents alike. Kids who are smarter than their peers have no recourse other than being pushed up grade levels, which brings about its own set of negative challenges. By creating a system where students can learn though MOOCs and have teachers who can aid them, the 3rd grader who should be learning at an 8th grade level can stay with his age group and get that social education which is ultimately just as important as the mathematical and science education.
For example, with regards to the MITX 6002x course:
"MIT reports that 155,000 people registered for MITx 6.002x and of those, approximately 23,000 tried the first problem set, 9,000 passed the midterm, and 7,157 passed the course as a whole. According to MITx: "… if the number is looked at in absolute terms, it had as many students as might take the course in 40 years at MIT.”"
http://www.nebhe.org/thejournal/disruptive-innovation-changi...