Andrew Norton has a good post on the furore surrounding for-profit schools. Like him, I find it hard to get too worked up about this. What matters is not whether a school makes a profit, but whether it’s subject to competition from the market (monopoly schools could behave badly), and reasonable accountability constraints from the government.
As a society, we’ve been willing to allow profit-making corporations to run preschools, universities and parts of the health care sector. It’s hard for me to see what’s so sacred about primary schools and high schools. That said, I wouldn’t expect magic from them. My read of the US evidence is that for profit companies like Edison Schools have done about as well as nearby public schools (see this 2mb report, for example).