I am going to admit to having big splinters in my arse for fence sitting on this issue...
I have a DS in a special school. He has been since nursery and will be until 6th form (year 11 currently). We will never know if that was the best decision because it was the decision we made and don't know how it would have panned out otherwise.
All I can say is that, for him, it gave him exactly the support he needed and he DOES have a strong peer group with similar ability levels, lots of friends and it has given him the gift of speech as well as sign language, which he didn't have before (Deaf).
I am a Teacher of the Deaf and support children in mainstream schools. I am not going to lie. They different enormously in the quality and amount of support they provide. We advise and support, but the schools have to spend their extra money wisely and put in the support agreed. Most do. Some don't. For some children, they completely thrive and it fits like a glove. Others seriously struggle and end up mainly 1:1 out of class, which should never happen.
In the cases of those children, I would always advise a resource base. Mainstream school with specialist provision.
They are - again - variable. Some are wonderfully inclusive, the resource base children are part and parcel of the school, attend mainstream with specialist support and are socially integrated. In some that is less well accomplished.
Sometimes children in both mainstream and resource base provision have needs that can't be met that way. They have no peer group, they are always separate and different. They usually have needs above and beyond their primary need - and in those cases, special schools are absolutely what they need.
I taught in a special school too, so I know how well they fit some children. On the other hand, I have taught children in special schools who I have felt really strongly should have been in mainstream... but in the end, whatever strong advice you give, parental choice can not be over-ridden.
So really and truly, it's horses for courses and I think the fact that there are all of those different models and experts who know the children to guide them in the right direction is a real strength of the system.
There is no assumption that a child with special needs will go to a special school. In fact, the guidance in my LA is exactly the opposite: assume mainstream unless there is strong evidence against that - and there has to be strong evidence that reasonable adjustments can't be made. I think that is the right way round.