There's a small debate in the Times Higher Education Supplement over intelligent design being taught in schools. First exhibit: can anyone figure out what the ID defender is saying? Does he have an argument? Second exhibit: the critic of ID is arguing for the beneficial effects of faith schools. Unbeknownst to me, there are a large number of religious state schools in the UK. The author argues that the faith schools can be used as a tool to integrate Muslims, and that a number of distortions in the U.S. educational system are the result of the fact that religious education is run almost entirely by the private sector.
Aside from the constitutional problems with anything similar to the British system, I think it would be a horrible idea. My picture of how primary and secondary education should work is even funding for all schools at the national level, with the states given the option to increase funding for education, again subject to maintaining an equitable distribution of resources between school districts. You'd have to couple this with high taxes imposed on private schools to prevent the middle and upper classes from fleeing the public schools and manoeuvring to slash funding for public education. The salutary side effect of this would be to, in an entirely constitutional fashion, push a lot of religious education out of existence. There would still be private religious schools for the fanatics who were able to pay, as well as some extremely prestigious schools, but the net effect would be to improve the quality of public education while making it more egalitarian.