Abriata, I can assure you that I am very dissimilar to the parents who send their kids to private schools.
That said, yes, I would be very worried if I were in their situation. My son's school went from 'outstanding' to needing improvement in the space of a few years and I actually took time off work to go to a special meeting about the matter where parents and governors took the SMT to task. We're back on track now, thankfully, and actually when we went through the report, in some places line by line, a lot of the problems were really to do with records not being kept thoroughly enough, so it wasn't as bad as it might have been. Also there were some anomalies for eg as far as Ofsted were concerned, the welfare of children was a problem but when we examined that part properly, attendance had been lumped in with welfare. Now, there are some kids at that school who only get there because the EWO physically goes to their houses, knocks on their doors and drives them to school herself - their home lives are chaotic, with drug and alcohol problems and police and ss involvement. So of course attendance is poor, but actually it didn't mean that the welfare of the rest of the children was affected, but still we didn't meet ofsted's criteria.
So for those of you with kids at the school I would be really pushing for a meeting involving you all, and doing what we did - properly examining the report, really pulling it to bits, asking what Ofsted were looking at when they wrote each part, working out which bits you can leave to the school to get right having had their knuckles rapped - eg are they really not challenging children or are they actually doing so and just not documenting it; in which case do the bloody paperwork but it isn't a great concern because the kids are getting taught anyway - and which bits do actually affect the education that your children are getting.