1. The basic problem is curricular. "What knowledge (skills, etc.) is of most worth?" This is a value problem, not a methodological one. Our society has dumped the old consensus on this, and has stumbled or been pushed into the present consensus. Now, if society were to change its values -- call it revival, call it renaissance, call it what you will -- then the schools would come to reflect those values, willy-nilly. In the meantime, we are living through an Age of Dumbth, in which mediocrity is okay.
2. Can the current public school system fix this? No. The system is designed for the results it is getting. As one school of thought in Education puts it, "the whole school IS the curriculum." That means that meeting the schoolyard bully, adapting to bus schedules, coping with cafeteria food, and the Senior Prom are equally valid as measures of what schools produce as language and math skills.
In fact, education is a mere byproduct of the schools as we have them. School is a totalizing experience run by an entrenched bureaucracy. It doesn't really care what it produces, so long as it exercises control over the daily life of the children in its care and has the resources it demands. The command mentality reigns. Ideology and petty rules are the order of the day. The many good teachers and caring administrators I know might well be offended by that characterization, but the fact that they humanize the experience of public school for many students does not change the fact that public schools are capable of monstrous abuse and stifling conformity. They complain about it, too -- until an outsider mentions it, whereupon they close ranks against the boy who remarks on the Emperor's clothing.
In the meantime, requiring more days of school, spending more money, and testing! TESTING! TESTING! are all a mammoth waste of time. None of these can change the system, and the system can only produce what it was designed to produce.
3. The obvious way to correct the flaccid performance of a bloated system is through competition. If the public schools had real competition, they would have to reform themselves and produce different results in order to keep their customers (the families who send their children to school). This would require the existence of valid alternatives to the public schools in a community. Currently, parochial schools and homeschooling are the main alternatives, and they are not available everywhere, nor do they provide all the social goods that public schools claim to provide. They are also designed to be "for our group only." They really aren't trying to attract anybody but those who identify with their particular subcultures.
Real competition would also require allowing public schools to fail, that is, face going out of business unless they do a better job. Allowing a school to fail would be seen as a dereliction of public duty on the part of the State government, however. Only if there were sufficient alternatives in a community which could absorb the lion's share of the public school students in the event of public school failure could one imagine the State letting a school go bust.
4. The State may indeed recognize the need for competition; nevertheless, it has a conflict of interest in creating competition. Public schools as we have them were designed to be a State monopoly. How, then, can the State create alternative systems without disowning the public system? The proffered solution -- "charter schools" -- aren't really a separate system. They're just a favored (and resented) branch of the existing public monopoly.
Probably the only way to create true competition without disowning responsibility for the public system would be a thorough-going Voucher system, in which the State would quantify the cost of education per pupil and grant that much per pupil to each family, to be spent on any schooling that meets minimal criteria. This would force public and private school systems to compete directly for education dollars. If the vast majority of private schools competing for the vouchered dollars were religious schools, there would of course be a lot of nasty things said and legal challenges made about separation of church and state, so the amounts granted in vouchers would have to be sufficient to attract those who would form secular private schools to compete for them. Meanwhile, doing away with school districts would allow families free choice among all the public schools within driving distance of their home.
5. And what sort of things might quality alternative schools model? Well, curricular excellence, for one thing, which is the whole point. But also, alternative schools could provide: smaller campuses, using more community resources rather than building fortresses with everything under one roof; a greater proportion of teachers on staff and a smaller proportion of administrators; a less stressful and better disciplined social environment.
And what would one give up in choosing a quality alternative school? The biggie is that smaller schools could not offer the big sports and extracurricular programs that so define our public schools. They would have less social clout, too. And there would be fewer prospects for promotion within the system, because there would be fewer administrative and specialist positions. Still, I think many of the social goods provided by community sports teams and extracurriculars could be detached from schools -- as they are in Europe -- and all schools would be the better for being spared the distractions of running so many non-educative programs.
6. Or we could just renew our entire society and change what it values. (Return to No. 1, repeat as necessary.)