Your vision for how to fix schools depends on your metaphors.
I've just finished reading Phillip Schlechty's Leading for Learning.
At different times we imagine schools as factories, suppliers of learning, warehouses, or prisons. Factories take uniform raw materials (students) and transform them into end-products (workers or taxpayers). If we look at schools as factories, we want use statistical process techniques to become more efficient; we want to come up with the one best technique for any situation, and replicate it, until we scientifically determine that something else works better.
Suppliers of learning seek to meet the needs (content, entertainment) of customers (students). Thus, schools as professional learning organizations will want to find the best content, and economically deliver it to students.
Warehouses are places to store things (students) while other things get done; school here is a service that allows parents to work without worrying about their kids. Prisons prevent potentially dangerous people from inflicting harm on society while hopefully teaching them not to do it in the future.
To a certain extent, schools are all of these things, they all touch on different aspects of what we want schools to be. But all lead to centralization, hierarchy, bureaucracy, and stagnation. And eventually, according to Schlechtly, they lead to the alienation of schools from society, as those who bridle against the educational rigidity and who can afford to send their kids into better environments while resenting paying for the schooling of other people's kids.
Schlechtly cogently argues against national standards. National standards further remove education from the community, lead to narrowly focused testing, and add further support to the entrenched bureaucracy and power structures.
He argues that we must envision schools as learning organizations. Teachers learn to provide students with engaging work that helps them learn, students become better learners, both in groups and as individuals, and communities actively participate in the education of their youth. Only when the community becomes a real part of the educational process will they commit the resources necessary to guide students to become citizens of the 21st century.
It's an interesting perspective, and meshes with what Project Tomorrow calls free agent learners. Wouldn't it be great if schools could ignite kids to want to learn while teaching them how?