I think it really depends on the quality of your public schools. My kids all go to public schools (4th grade, Young 5's, and 4 year old preschool) and I am very happy with it. We have very good schools in our city and I like that they go to school with a relatively diverse group of kids. (Different races, income levels, backgrounds, etc.)
If the quality of our schools declined (a real possiblity with continually decreasing funding) I would have no problem putting my kids in the local Catholic school (our only private school option) but for now I am satisfied with the public schools.
The one disadvantage I find is that along with the diversity in the schools comes exposure to things that I might prefer they are not exposed to but that is going to happen sooner or later regardless. And I try to look at it as a teaching opportunity as it comes up.