Presumably a "Real" school would redistribute kids to keep the houses even, not use a talking hat that is reading minds and seems like the main reason by there are bad wizards in the first place
The internal recruitment is another odd thing about the books. Is wizarding a skill that anyone can learn (and the wizards keep the skill mostly to themselves), is it some sort of natural ability, genetic or otherwise, that just has a higher prevalence amongst the wizards, or some totally random phenomenon that chooses it's practitioners? I don't recall this being explored much in the books, other than there are certainly muggles with the gift, wizards with minimal to no talent in it. At least, so far, there are no midiclorians