Not enough opportunities for slightly above average students to excel. Too much money is poured into special education compared to regular education. i.e. your $10k per student average isn't the same as the median expense per student. Too much inclusion at the high school level in math and science courses - as unpolitically correct as it is to say so, it has led to lower expectations which has spread to the average students. There are several studies that have shown that since NCLB, states have decreased their standards in order to meet the expectations of progress and higher achievement for students with disabilities & for minority students.
Look at the algebra test in NY. 20 years ago, the test was worth 100 points. A 65% was passing, below 65% was failing. Now, the scores are "standardized" by psychometricians. A student now needs to get 30 points out of 87 in order to get a scaled score of 65%.
30 out of 87 is 34%. 34% is passing. Of course, there are some in NY who like to say "but they got to choose which 4 out of 7 ten point questions they did, so they really only needed 65 points out of 130 possible points." Sorry, but they didn't get the opportunity to do all 7 questions; they were only allowed to attempt 4, thus 130 points were never possible.
34% is passing in math.
http://www.emsc.nysed.gov/osa/concht/june09/ia-cc-609.htm
Here's the test:
http://www.nysedregents.org/testing/mathre/609/ia-609w.pdf
30 of the questions are multiple choice, worth 2 points each. If a student manages to get just 15 of the multiple choice questions correct, without doing any other questions on the test, they pass. (All of my students pass based on the multiple choice questions alone.)
For what it's worth, a neighboring school district had a student on in school suspension. If not for that fact, the student probably wouldn't have taken the final exam a couple of years ago. They "forced" him to take the final exam. He only answered the part 1 multiple choice questions, by making a pattern of 1 2 3 4 1 2 3 4 on his answer sheet. He just missed passing by the skin of his teeth.
The pass scores are similar in Geometry (slightly higher), Earth Science, and Biology - basically, what's more or less required to graduate.
But, guess what happens over the long run when the expectations are so low? I personally try to keep my own expectations up for my students - the level of difficulty of the problems they're currently working on is far more advanced than what's expected on their final exam. But, statewide, this probably isn't generally the case.