That’s precisely what we need – elitist schools.
Actually, yes.
Instead of the “elite” being decided by their parents, and how Frum they act, it makes much more sense to dedicate resources to those who have ability (determined via testing, upkeep with Amailus). That way they can give back to the Klal materially (not just being a “Shas zogger”, which may help spiritually), either in the outside world or Bezras Hashem as the next well rounded Gadol. And with the concentration of elite students (partially because of the free/reduced tuition offered), the competition will only raise the level of the school. Kinas Sofrim Tarbeh Chochmah.
While we have been pursuing a “no child left behind” strategy, and that can certainly be continued, it makes the most sense to help create the next generation of Rabbonim, Poskim and Tomchim that help Klal Yisroel continue.
Besides, isn’t the idea of an elite school exactly what Rav Avraham Yehoshua (in EY) has? If anything, you should support this idea.