I am very torn on this subject. Instinctively, I feel that mixed ability classes are probably better for the majority of children. I don't like labelling of any kind, and telling a child which set they are in instantly creates a label which may impact on motivation, self-perception, confidence etc.
At the same time, I remember being desperately bored in mixed ability classes when I was at secondary school. Sometimes we went painfully slow, and that too had the potential to impact on motivation and engagement etc.
My dd was set half way through year 7 for all subjects, including art, music, PE and drama. She is in top sets for everything except PE. She infinitely prefers being set for everything, including PE. However she was surprised to find that there is still a huge range of ability even within the top sets - even in maths where there are seven different groups! So I guess that mixed ability teaching is a thing even in schools where setting is the norm, it's just that the range is slightly narrower.
In light of this, I do wonder if setting could lead to less effective differentiation in some schools, because the kids are already set according to ability and the assumption is therefore that the pupils in any particular set are therefore working at a similar level of ability to one another. Perhaps in a truly mixed ability class, the teachers would be able to respond more to individual differences. However, that would presumably require a lot of extra work from the teacher.
Like I said, I'm torn. DD certainly prefers to be set, but I'm not convinced that she is necessarily stretched any more as a result of being set than she was in a mixed ability primary school class. As others have said, it could be the impact of behavioural issues as much as anything else. It's interesting to hear what teachers think.