I only skimmed through this thread but it's weird that no one has pointed out that OP is actually incorrect. The mentally retarded do go to school with the average and above average children (at least in America): They're called Inclusion Laws. The Individuals with Disabilities Education Act (IDEA) enacted in 1975 provides funding for the inclusion of Special Education in public schools, as well as two federal laws, enforced by the Department's Office for Civil Rights, containing requirements relating to disabled students in public elementary or secondary education programs.
There are definitely pros and cons for everyone involved in these situations, but I thought it important to at least point out the faulty premise of OP.
Edit: One more thing. For some of the people feeling bad as a result of this thread please know: You is smart, you is kind, you is important.
The retarded may go to the same school, but they are segregated to special areas called resource rooms. Sometimes the smarter students are mainstreamed for a few hours of the day. Average children would have little interaction with the retarded despite going to the same school.