What is my child's LRE?

Do self-contained classrooms actually benefit children? Or are they just a dumping ground for disruptive kids?

We initiated an IEP for my 6 year old (first grade) about a month ago. He's not behind academically, but has some disruptive behavioral issues. I fully understand that his behavior negatively affects his teacher and the other students.

He's been with a one-on-one para, doing half-days. We were told that we would try this for a while and see if he improves. In the month since starting this arrangement, we've seen a lot of improvement, though hes pretty isolated. We'd like to keep working towards getting him back into a mainstream classroom.

However, his school ALREADY wants to send him to an "academic behavior support" classroom.

My concerns are: 1. He's only six. He's already so anxious about school, and all of thse changes have been really on him. He's deeply remorseful after every bad day. He blames himself and expresses a desire to be "like other kids". 2. He's very bright, and I'm worried that this could hold him back academically. 3. It doesnt seem like the goal of the ABS classroom is to help him re-integrate into the mainstream classroom. It seems like once he's there, he's stuck there. 4. I worry about the older kids in the classroom. 5. I've never seen any hopeful "success" stories about these classrooms.

Reading this sub and other has made me feel really hopeless. It honestly seems like teachers see kids like my son as a nuisance that they can't wait to discard so they can move on. I love my son and truly believe he can improve, but it feels like no one will give him a chance. It's really easy to blame the parents in these situations, but we are willing to do whatever it takes to help him. We just don't want to make things worse.

Any advice or guidance at all is appreciate.

Edit: Thanks to those who have replied. I appreciate the variety of perspectives. This has been really helpful.

Please keep in mind that I don't think he "deserves" to harm anyone or jeopardize the education of other children. That's unacceptable to me as well. However, I don't think he "deserves" to be cast aside as a lost cause at 6 years old either. I just want to get as much information as possible to decide what is in his best interest, as I'm his best and only advocate. I recognize teachers have a tough job, but I hope at the end of the day you can see that he's a human being with a whole life ahead of him.

Problem behaviors: panic-attack level anxiety over unexpected changes or especially frustrating tasks, sensitive to excessive stimulation and noise, running away, self harm, some aggressive behaviors towards others. Aggressive behaviors are infrequent (2-3 times ever, and not since January). These behaviors have improved a lot with the para (greatly reduced frequency and duration). At home, he's a lot more relaxed and I can diffuse situations really quickly (I generally acknowledge his frustration in a neutral voice and calmly redirect him). To be clear, I don't think these behaviors are acceptable, and we address them specifically in the IEP and work with him on them at home.

Edit 2: Just wanted to say thanks again for all of the responses. I can't reply to them all individually, but it's been helpful to hear your point of view.