Well,
I'm not sure if this is the same but in dd's school they do try to differentiate by grouping kids of different abilities. She's in a private school so there is no gifted program. This grouping just makes sense to me. Dd was in a math group in her class and a University student came and taught those kids who "got" the concepts faster than the others. Why make the faster kids "wait" for the slower ones to get it.
What exactly were the parents concerns over the groupings?