My answer is a combination of things:
It should be done when it serves the best interest of the child, and does not impair the education of other students.  OK, that's one of your choices. But I make it more complex because I think both "best interest" of the child and "impair the education" are too complex to just be left alone.  

There are good things about mainstreaming in many cases, and the law starting it was very well intentioned and designed to prevent some horrific stuff that was going on with us special needs folk.  But it is now used, sometimes, as a way for the state to save money by denying services to kids who need them.  

In terms of the other kids - I think, properly managed, mainstreaming can HELP the other kids.  But mismanaged, it can impede their progress.  Given the current administration's disregard for education, teaching, teachers, and schools, I fear that MISmanagement is not going to decrease until we elect some more Democrats!

Good diary.

Not to too shamelessly whore my own diary, but it's related, and it's Disabilities, abilities, boxes and people