Yes, the kids aren't going to get any brighter, but they may develop a little more maturity to gain coping skills and daily living skills that are so necessary once they leave public school. We are very careful to assure the student, at the time of retention, that this isn't a punishment. Of course there are repercussions as far as self-esteem, but in the long run the child's comfort level is increased. The child will not become brighter due to retention. The child will most likely not perform as well as the children in the class into which they are placed after retention.
Children have no choice over how capable they are.
Children have no choice over the family into which they are born. Children have no choice over the problems which life leaves on their doorsteps, and which distract from their ability to concentrate on school work. Retaining all the poorly performing children will surely impact class sizes. I see this picture of fifteen year old first grade students. It is not a pretty picture.