Bad for special needs kids -- lack of specialized care.
Bad for average kids -- teachers have to focus on kids with problems.
Bad for gifted kids -- special programs are made for troubled kids, no resources left for the gifted.
Bad for communities -- schools become totally dysfunctional.
No one in this story knew how to behave rationally. Because the situation was botched from the start. Mainstreaming doesn't work.
Schools love it because they get several times more money for anyone diagnosed “special needs”.