I do not agree. I think this is another example of governments abdicating its role of governance. We set up governments not to make profit, but to take care of things which can not be managed by private individual pursuit of profit. It is indeed not the other way round. Education is one of those areas, and governments abdicating its role of educating people may actually alter the social balance, come in the way of social progress and end up making social relationships unsustainable.
Let me explain. In my mind, education is a social utility. The education system exists to make the students socially useful, through work, through behaviour and interactions with other people. Yes, undeniably, education also builds the foundation of individual success, but that success, indeed, needs to be attained in the context of the society. And, because, education builds the functional society and prepares individual members regarding their social functions, it should ideally be paid for, at least, majorly, by social funds.
Also consider what happens in private education. First, we introduce a consumerist perspective, where the individual student pays for the education s/he receives. It is all but natural to expect, therefore, that this would contribute to his own individual success. In terms of the money s/he earns post-education becomes the sole measure of effectiveness of education. The societal perspective is completely forgotten. This system is likely to subvert the moral commitment to our societies that we must grow up with.
Second, privately funded education is likely to create a modern caste system, and in places where it already exists, will strengthen the same. Since education has become a function of the ability to pay, it has now created tiered social groups which will move away from one another rather than coming any closer. One may argue that student funding system is supposed to encounter this, but that sort of social funds do not exist in many countries and where they do, they are increasingly under-resourced. The private education has skewed the costs of education as well, by attracting top academics with higher pay and research opportunities, and hence the public education system now lives on borrowed time.
The point of education is to create a questioning attitude, and an engagement with society with a free and enquiring mind. Private education subverts this motive, create disengagement rather than engagement, and promotes conformity rather than questioning. This is not a recipe for progress: This is a roll-back of the role of education in the society.
I am fearful because this imbalances are now acute in the fast-developing countries like India. This will not only prove to be the limits of its growth, but this will be its undoing: Its society will not survive if a private education system props up the age-old caste system and create a new tier of privilege, and leave most of people out. The private education has become an excuse for governments to abdicate its responsibilities altogether, and that does not bode well for the long term health of these economies and societies in general.