I totally agree.  Our local PS kindergarten is basically first grade IMHO.  It's all day and it's quite structured.  I know several kids that it was definitely the right decision to hold them back.  I know a couple other very young for grade kids who weren't held back, that struggled for K and beyond.  For a sensitive child, to get pigeon holed as a behavioral problem can be damaging.  And I do know other kids who were held back that definitely shouldn't have been.
I have a 5 year old I assume is GT and can read, write, do math, composes music, writes her own poems and stories.  She turned 5 in the summer.  She would have had a really hard time emotionally holding it together in all day kindergarten.  We are homschooling "K" for her.  
It's just a difficult problem that there need to be 25 kids in a classroom that are all at very different places emotionally, socially, and academically.  So I don't necessarily fault parents for making these tough decisions.