Superb analysis. I had never considered that full funding of special education costs by the federal government would dramatically increase public schools' incentive to classify challenging children. The recommendation to "voucherize" classified children would certainly reduce the incentive for misidentification.
As to the causes for high numbers of "learning disability" classifications, all the possibilities you mention probably play a role. My best guess--after 28 years as a learning disabilities teacher (retired two years)--as to the major culprit, however, is weak reading instruction (whole language philosophy) for at-risk children in the first two grades.
I can't say with certainty, however, that early reading instruction is worse today that 30 years ago. Only in the past decade did I begin teaching children as young 3rd graders. I can say that K-2 reading instruction, as I witnessed it, is weak today for at-risk children because of the lack of systematic, sequential phonics in the early grades. But I doubt if it was ever strong in the past half century.
Tom Shuford
Special Education Teacher, 3rd and 4th grades, 28 years, Retired
Ventura, CA