It's true the education system is flawed in its current form where I live (in Australia). However, it is improving as the years go by. My school recently did a whole curriculum review to emphasise creativity, individualism and leadership, amongst other qualities. But the majority of school are sticking to the traditional ways of teaching which stifles innovation and growth in children.
Your example of the teacher diagnosing your child perfectly exemplifies the "if you don't do what we say, you'd doing it wrong" mentality. It is irresponsible, offensive and probably illegal for that teacher to have done that.
Thanks for posting and all the best with your children!
Education is the key to a successful future.
Have a nice day