In theory yes, coldtits, classes spanning a 2-3 year age range should be fine, if the teacher is good and has the time and resources to differentiate appropriately. Unfortunately in the real world that does not always happen.
My DCs used to go to a school (not in this country) which was multiage by design, and had at least a three year age span in each class, plus two languages in the classroom and at least half a dozen native languages spoken by the children.
It worked really well - but classes were never bigger than 20, there were two full-time teachers for each class, and extra teaching staff to provide additional support for non-native speakers of the two classroom languages, plus specialist teachers for art, PE etc. So the two main teachers were very rarely teaching even ten of the children at the same time, often only five or six. Not surprisingly, they were able to differentiate for all the different abilities extremely well. Even so, at one stage they were thinking of moving DS up to the next class a year early because he was in an ability group of one for maths and English - the fact that his other language lagged behind, as did his writing/motor skills meant that in the end he stayed in his original class.
However, most state schools in this country which operate a mixed year system have one teacher in charge of 30 children, possibly a teaching assistant some or all of the time but often the TA's role is to support specific children with particular learning difficulties or EAL issues. The ability range of the two-year age-range is likely to be at least four years.
Yes, a really good teacher can cope with that and provide good and stimulating differentiated work for even the most able pupils - but realistically even a brilliant teacher will sometimes struggle under that workload, let alone an average one.
DD was in a mixed-year class for a couple of years at a UK state primary, and while she did very well and enjoyed school when she was a bright one in the younger half of the class, the following year when she was one of the oldest as well as one of the most able, there were definitely times when the work did not seem to be particularly challenging for her, to say the least.
I'm not trying to say that children should be moved up and down school years willy-nilly, but I also don't think that there is an overwhelming need to be in a class with people who happen to have been born in the same arbitrary 12- (or even 24-)month period if in other respects a child would fit in better with a different year group, whether it is higher or lower.