I started kindergarten in the late 70's. One thing that my elementary school did was differentiate instruction a lot more than my kids' current school does. Ironically, they call my kids' school a "traditional" school in terms of format. By traditional, I guess they mean circa 1950. We had what were called "Pods" (a big open space for each grade) with 3 classrooms in each pod, and were grouped according to ability for both reading and math. And we went to the classroom and teacher in the pod that matched our level. I was always in the high reading group and the low math group. They must have done some testing to determine who went where (but not standardized testing). And kids worked at their level. For math, for instance, if a kid finished a worksheet and mastered a concept, they went onto the next worksheet.
Now my kids are stuck in a single class with all different ability levels, and everyone does the math curriculum at the same pace. "Gifted clusters" start in third grade but all it really is is enrichment activities involving higher order thinking skills (and not very often, from what I can tell). The school thinks that since they have an official "gifted" program they are off the hook in terms of differentiating. It doesn't matter that all the kids in the gifted cluster are scoring 98th-99th percentile on math achievement tests--they can't move through the curriculum any faster. Honestly, I couldn't care less about the label "gifted"--I just want my kids to learn something in school on a daily, regular basis! I would gladly go to a school that did not have a "gifted" program or do any kind of ability/IQ testing if only they would let my kids work at their pace.
The school does a bit better in reading, in that they have leveled reading groups, but not much. They still have to go through the grade-level reading curriculum.
There is a school in our district that has a very open layout like the one I grew up in, and they combine grades. It was also built in the 60's or 70's (I call it the "hippie" school).