I think that the reason that we "turn our kids over to an institution" (schools) is that historically educational institutions had a high degree of quality. That past quality has translated into current pedigree and so we wind up with graduates who are credentialed, but not educated.Well, that's how I think the education bubble will pop. In practice, what will happen is that a town or city facing a huge budget hole will notice a free alternative and implement it while firing their teachers and education administrators. That process will repeat, if the free alternative adequately meets the educational needs of the community, so maybe the bubble has a slow leak instead of just popping.
The historic quality of education was derived from the fact that educators of yore were at the top of the yet-to-be-named knowledge worker pyramid. Today, they're basically at the bottom--no one fails out of an early education degree and decides to go into engineering. What's happened is that there are a lot more job opportunities for the smartest people so they go work for Google or whatever while the marginal college students tack on the courses necessary to become a teacher as a fall back position. Or, worse, they go into public policy or some other apprenticeship for bureaucrats/education administrators.
A hundred years ago that education bureaucracy didn't really exist. A few people noticed that every time education issues were voted on, more money went to schools. Now, there are battalions of administrators studying everything in their school district except their own efficacy. The first rule of every bureaucracy is to spend your budget. The second rule of every bureaucracy is to fail. They're effective bureaucrats.
And the response of parents (homeschooling or private school) has now become common. They've basically exited the system. In a perfect Hayekian world, a new educational order would emerge. I believe what homeschoolers are unintentionally doing is implementing, testing, and refining that new educational order. At some point, there will be a better and free alternative to public education and shortly there after, public education ceases to be a line item in government budgets.
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