I've heard that too. I'd like to see how the ps kids would do on that test if they gave it to all of them each August. I'm guessing they'd bomb it.
My dd went back to ps for 7th grade last year, after 5 years of hs. They gave her a placement test and she aced it, so they recommended putting her in prealgebra. She had already finished Algebra 1 at home, so I asked them to put her in Geometry. They were reluctant, but were willing to try it since she had very high scores on NAEP and ITBS.
The kids in her class were those that did prealgebra in 6th, algebra 1 in 7th- so they were the highest achieving math students in the school. My dd was easily the most prepared. She was shocked at how much trouble they had with basic computation- especially fractions. She had no trouble getting an A.
Of course, I'm sure that there are many unprepared hs kids too.