> They believe that keeping these bad people in an otherwise good population will magically reform them

People believe this because it very often works and its pretty well documented. You have this reductive view that there are "good people" and "bad people" and those are somehow immutable. This isn't a video game where your job is to punish the bad guys. So much misbehavior in high-poverty schools is the result of poverty, and so much of the rest is atmosphere. If everyone in your school grew up in generational poverty and sees nothing but the behaviors that that engenders, you're going to act the way everyone around you acts. If everyone in your school grew up middle class, with middle class behaviors, you're going to act differently. Are kids in that situation going to immediately become perfect, 100% of the time? Of coures not. But on the whole it's absolutely beneficial.

You just have to have faith in people and a genuine desire to help, not your sneering dismissiveness of people who grew up in poverty as inherently "shitty people".