I don't think you should segregate schools. Just classrooms. That gives students in 'bad' classes something to aspire to, and keeps them on the map rather than being written-off to a 'poor school', and parents should realise that, though their kid is in the 'bad' class, they are getting appropriate help, not just being discarded.
In some ways, the 'best' teachers should be assigned to the 'bad' kids, certainly those with the best command of a class. The 'good' kids don't need that so much.