I can tell you we have the exact same situation in Denmark, but our education system is even more expensive than yours, and we do worse in the PISA test.
http://www.nytimes.com/2010/12/07/education/07education.html
I've been working as a teacher at a private school for 3 years now. I'm a M.Sc. in microbiology, so I haven't had a teachers education. The school I work at, is a school where our approach is more academic oriented than the average public school. So 80-90% of our students wants to learn and work really hard at it. This doesn't mean you have to be a gifted to attend the school, just that you're willing to what you can to improve and learn.
There are several problems with the education systems today.
1. Teachers are often not the top students of a class, because the teachers aren't respected any more and the salary is pretty low, and thus the quality of teaching diminish.
2. Since the parents have no respect for the teacher, neither will the children, and that allows for noisy children making teaching pretty hard.
3. To many politicians, parents etc. think they know how to do the best teaching. No-one listens to those who have actually taken an education in teaching.