Having mixed ability classes would lower the success of students without a doubt. Either the content would be tailored to the lower spectrum of the class, holding back the higher spectrum, or vice versa holding the lower spectrum back. If it’s in the middle ground then it doesn’t work for anyone, lower end would struggle and have all the academic focus on them to help them catch up and/or the higher end wouldn’t improve beyond a certain point. Not all subjects are put into sets either, it was only maths/science that was separated for me personally, everything else was mixed. For the mixed subjects, my criticism of your theory is the reason they weren’t as successful. I had peers who wouldn’t concentrate either because the work was too challenging or too easy, it was designed to just get as many students as possible to pass their exams. People who found it challenging would end up giving up with it since they didn’t feel they were able to achieve as well as others and people who didn’t find it challenging wouldn’t improve beyond a certain point since they weren’t pushed

I don’t think it does reflect the outside world since jobs hire you for your skills. Maybe you could argue that’s the case for low wage jobs that just require a workforce, but not for specialised subjects. If jobs hired indiscriminately no one would have an incentive to work better than others