No Special Schools in San Francisco?

Rich families...

I thought the mom explained that she had been expelled from the school she'd been attending near their home.

Things can change rapidly, especially regarding social issues. The movie itself is nearly 16 years old, tack on the extra 10 or so years prior when they decided to send her to the school and you have a very different world.

In the past 20+ years opportunities have only grown. New schools, new policies, more knowledgeable and informed population.
Placing your 2014 ideals and practices on a 1989 world is unreasonable. I mean, yes its regrettable, of course it is, but unless you've been in situation yourself in the same time period then you can't really say how people should be allowed to act.

Outside of social issues, there are a host of possibilities for why they might have picked that school, specifically, rather than one closer to home. Perhaps, at that time there were no specialized schools for Carla in the area, or perhaps they had already gone to those schools, and they were not capable of caring for Carla. Not every school is equal. It's possible the schools in that area have a bad reputation or did not offer all the resources Carla needed.
It's also possible the school they chose was the best in the state, region or even country. I'm not a parent but you'd bet your ass that I would absolutely love to provide my child with the highest quality education I can, even if that means not seeing them that often, rather than foolishly keep them close and give them a mediocre or even terrible education.

And you act as if the school was a prison, where she was just kept in a room all day. She received an excellent education at a school that specializes in her needs. Something that will help prepare her for the world a hell of a lot more than spending more holidays with a group of people that have a hard time understanding her.

I'm not saying this was a great family, they obviously didn't bother to connect with her all that much during her stay at the school, but realistically, sending her there was ultimately the best thing they could have ever done for her, at that point in human history.