How moral is it for the self appointed elite to deliberately keep the "peasants" ignorant so they can be more easily manipulated, even if it is supposed to be fore the benefit of the country?

See Say reading had already been tested and found to be a failure among hearing students (It was invented to teach the deaf, who have a hard time learning to read with phonics) when it was forced into the government schools.

For that matter, we had a 98% literacy rate before the passage of the first compulsory attendance law (which has been falling ever since), and the system our schools were patterned after was designed to produce obedient soldiers, not literacy.

Government schools are not broken at all. They are functioning exactly as they were designed; producing a large population of people who are so incapable of thinking for themselves they can be easily confused as to which bathroom they should use! And if they can be indoctrinated to become mindless consumers, so much the better!