By some synchronicity the thread on labelling inversely parallels a lively debate on my Old School e-group.  The grammar school I attended had an extremely selective approach to intake, yet  a large number of ex-pupils felt abandoned and de-motivated and have a real hatred for the unsupportive regime.  We were labelled 'bright' and made to feel like failures if we couldn't hack it unassisted.
I'll repeat something I've just posted to that group:

This debate led me this morning to browse through my aging books on IQ. I came across an interesting observation from Eysenck in 1962 (reprinted 1978).

"...it is often found, particularly with very able children, that teaching of school subjects in a manner appropriate to the average I.Q. of their class makes them rebel to such an extent that they prefer to go their own way, read what interests them, and pay no attention to what they are taught. 
Under these conditions the very bright child may do poorly in examinations, only to come into his own in later life when ability and motivation come together in pursuit of some worth while goal.  This, of course, does not always happen, and there are many extremely able people who fail in achievement because of defects in motivation."

Sounds about right to me.  Certainly it seems relevant to my personal experience; at the age of 42 I'm just finding out what I want to be when I grow up!