Even if most students suck as tutors (which they probably do – tutoring is difficult), the benefits outweigh the problems by a big margin. Most importantly, it allows each student the desired individual focus. But it also improves the tutors' memories of the classes they used to take.
I'm baffled it's not more widely employed in lower education. (Higher education seems to get it right by using former students as TAs. Although then it happens against payment. I'd argue for simply making it part of the regular curriculum.)