I know people who were thought to be 'learning challenged' in elementary school who went onto MIT and do great things... so no I disagree you can ascertain that at age 10.
Well, as I said, the system is not perfect, which is why there are several paths for "late bloomers" to make it to university. I myself got sorted into Hauptschule, but after a year my grades improved and I switched to Realschule, got a diploma, went to a Fachgymnasium and enrolled in university.
Btw I agree with grandparents argument that the parents' ambition is often the determining factor (as it was in my case) but I would rather try to find a way to assess the students innate abilities more accurately than to simply mix all students together.