(a) no one smart enough to understand the subject would want to work full-time teaching third graders
That's an awfully broad statement. I'm sure there can be found someone very smart that would be interested in contributing back to children... Woz comes to mind, as does Will Wright...
(b) only a small fraction of people are suited by ability and temperament for this kind of work, and you can't select them at age 5.
I think you're thinking along different lines than the poster. He doesn't look at this as starting a venture capital firm, but as a replacement for the broken public school system. The funding doesn't have to come from equity, but the general hypothesis smells right:
A good early schooling would allow those currently going to public school to create (on average) more wealth in the future. One could use a fraction of that (future) wealth to actually fund the school. From the little I understand, a lot of private Universities work this way - where a good chunk of their budgets comes from alumni donations.
Why can't this system work before college?