It is more then that. The longer they keep these kids in the system the harder it is to teach them later.
As a former high school teacher, I must say that you are 100% right. Until the 1960s about a third of the kids dropped out, precisely because they could learn more at work they could at school. Those that WANTED the academic stuff could take an equivalency exam. This is just part of the effort to justify schools for everyone from 3 to 21. More and more money for a misconceived system.
You're absolutely right that not everyone can fit into the mold. The public school's are one trick ponies. Anyone who doesn't fit in must be dysfunctional in some way. It never dawns on them that there could be any problems at their end. It's never their fault. All that is necessary is more teachers and more and more and more money.
Money solves every problem. Character is inconsequential.