I'm really surprised to see so many people here against it. I was even more surprised that it's a national news story. The school is infringing on the parents' rights,IMO.
I live in a slightly less-leafy part of the Dulwich area and I would definitely consider letting my kids make their way to school, if I had kids in school yet!
These parents are not negligent, they aren't letting it happen without giving it thought. They have assessed the abilities of their children and made a measured decision.
I went out on my bike to play unsupervised from the age of 6, and got myself to and from a bus stop every morning/afternoon with my 9 year old brother.
I think the parents are being totally sensible.