I think real damage is done: to personality, to self-concept ("I'm always in trouble so I'm a bad kid..."), to ability to accept less than perfection (or more than underachieving), to the child's whole understanding of what school is and why s/he is there at all, and to his/her feelings about parents and teachers and communicating with them or trusting them.
I totally agree (indeed, it is these concerns that gets my-panties-in-a-wad about my own DS6's situation). If the kid is completely bored, they aren't learning anything about the topic per se, but they are still learning. They are learning that teachers are stupid [um..from a 6 year old perspective], school is a waste of time, and they just should get in line and shush up. They are actively NOT learning things too. They are not learning to think, they are not learning to problem solve, and they are not learning respect.
