Not exactly. It is just that if there is too large a cohort of extremely intelligent kids, it will change the whole dynamic of the school, and lead to problems with legacy admits, donor admits, athlete admits, etc. Just imagine the difference between a place like Stuyvesant High School in NYC versus, say, Deerfield or Lawrenceville, just to pick two. Most kids at either of those boarding schools would not feel comfortable academically at Stuy, and, frankly, vice versa.
There is no right or wrong answer here. And most boarding schools do not have the luxury of filling a class with the very brightest kids anyway (although certainly some do). It is just a choice of how to run the business, not dissimilar from the choices made by many of the most elite colleges. All I am saying is that there is a group of kids chosen primarily for outstanding intellectual ability and academic potential at any boarding school that has the luxury of shaping its class, and that group is relatively small.
Well, of course. The school in large measure is geared towards kids around the 75-85 percentile (with a few school exceptions of course). Could they do as well if 50-75% of the class came in with >98% scores, with the classroom and curricular dynamics that would follow from that? I doubt it.