Buying a home based on good schools...is dumb?

I had a interesting dinner conversation recently on the subject of home buying based primarily on the local public schools.  As most at the table silently nodded in agreement, one individual pointed out something that I'm astonished I had not contemplated before.  Her statement that the areas available schools should not affect your home buying decision, especially if you have kids, left most stunned.  Moments of silence passed, then the realtor at the table began her rebuttal.  To think you should ignore the local schools flys in the face of conventional wisdom and more so one of most realtors most common selling points.  So why?

Home values are affected by the quality of the school district, but are us parents looking at the wrong thing?  Few will question that our educational system continues to decline, but are we basing our home buying based upon sending our children the best crappiest school available?  I'm all for trying to get my children to the best possible school, but put in context as to the quality of education available with public schools is not saying too much.  As dinner continued the conversation kept coming back to what is often the boring topic of buying a home, unless you're a realtor.  Another way to look at home buying emerged.  Instead of buying a home for an extra 250k in order to be in the "ideal" school district, what if you buy a home based solely on the area and suitability of the home for you and your family?  Save the 250k in home costs and in turn send your children to private school.  Average private school costs annually is 10k per year, costing your 120k to educate one child and ultimately saving you 130k.  Not too mention the reduced property taxes based upon lower property values adds another 40-80k to your bottom line.  If you feel so inclined to pay for your children's college education, I don't by the way, then you will have saved plenty of cash to accommodate this.  A better education for your children and you ultimately save money, it is not a bad idea.  If nothing else it left everyone at our dinner with something to think about.

US falls to average education ranking, full story:
http://www.google.com/hostednews/afp/article/ALeqM5juGFSx9LiPaur6eO1KJAypB2ImVQ?docId=CNG.5337504e8f65acf16c57d5cac3cfe339.1c1

Buying a home based on good schools...is dumb?