Segregate A graders from B graders?

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There are many schools which segregate students according to the grades they get. So the A graders would be in section 'A', lets suppose. And B graders would be in section 'B'. The reason for doing so is that if each section has A graders and B graders, both would get ignored. The A graders would not find anything challenging, plus the B graders may get demotivated by the high standard. So they make different class for A graders, where they have enrichment classes. A seperate Section for B graders where they have extra help classes, so that they can lift the B graders to A grade category. But there are many schools who do not segregate students as per their marks. They thing a mixed crowd in the class would be healthy for growth. They also believe that B graders would be looked down upon by A graders, and it would create an unhealthy hierarchy in the school. Plus, the B graders would get further demotiveted to do better. What do you think is right? Give your reasons for the same too!