I think one can argue whether or not the teachers are doing that in an effective and appropriate way, certainly. But I believe that this one underlying fact is nonnegotiable.
Personally, and as a parent, I find the repeated and forceful attempts to turn this into some kind of capitalist vs. socialist laboratory are both ill-conceived and ill-advised. Whatever else may be true of the situation, I believe it is certainly no place to institute a Lego-fied re-enactment of Lord of the Flies.