> this can work but loses a lot of economies of scale involved in education

You just finished arguing that schools need to be scaled down.

Schools are failing because they've abstracted childrearing away from communities and parents who actually have their best interests at heart, rather than using them as a chess piece to squeeze the maximum amount of funding out of taxpayers.

> congratulations you just reinvented the school

Schools and technical institutes have a certain amount of use for teaching specialised skills the average parent doesn't know. But they should be specific to their purpose and cater to children with skills and interests in that field. Not try (and fail) to be "for everyone."