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...hothousing to appear ready isn't the same thing as being ready.

Testing only identifies the appearance of the thing. Ergo, it is subject to "gaming" the system...
Agreed.

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ultimately, meeting demand probably is intrinsically operating at odds with meeting NEED. The two things are definitely not the same.
Agreed! Demand would need to be a sustained demand. Both cluster grouping and school-within-a-school can be utilized to address this. Unfortunately initial artificially high demand may be fueled by media hype and pressure by those who would like to operate in a divide-and-conquer mode. The power/influence of these forces upon a school may be mitigated by use of flexible cluster grouping and school-within-a-school.

At the moment I am thinking of a high schooler who's parent passed, resulting in temporary disruptions to home life until new roles were established and some healing had taken place. For a time, the lack of continuity and support at home rendered the student unable to function at their previously high level. The student's mind was simply occupied with other processing, and rightly so. Placement in a different cluster may be useful until the student is ready to take on additional challenge. Emphasis on readiness, ability.