I agree, better than having them be bored. Plus, the kids who, say, are already reading get stuck helping those who are struggling. While this is not a terrible thing, it gets really old. My DD's been doing it for years now--when does she get to work at her level? (Actually, the answer is, this year, she's in a gifted pullout 1 day/week, but she's had to wait for years to get it!).
Also, I don't know how it works in your school, but in ours, the gifted teacher is "trolling" for potentially gifted kids from day 1. She works in each classroom one a week and has different pull-outs that vary from grade to grade. Being in them doesn't automatically mean your kid is gifted, but it gives her a chance to view the high achievers, and even the lower ones, for kids who potentially are gifted. But the school overall isn't too quick to label the kids gifted--they may just be quick learners, or have a good home environment, etc. They don't actually test until fourth grade.