Some buildings would have to close which saves on upkeep and admin costs. No easy solution that is for sure. I taught in a very small school in ND (like 18 seniors) and there was something special about it, but at the same time there were kids with the same last name dating (no kidding - 2nd Cousins and not just a couple of them). I never saw more tight knit student relations, but at the same time they had one prin and he was in over his head and kids took advantage of him. No student support to speak of for special needs. There were some of the best teachers I taught with ever, but at the same time there was only one HS math teacher and he was not good. I taught a class in jr high I really shouldn't have to fit the needs. Actually one of the kids ended up in the Bush Admin...
But from a cost effectiveness it's not sustainable. Almost ALL population growth in Iowa is immigration (Spanish speaking). Put another way, the state ain't growing internally outside of Des Moines, maybe Council Bluffs/Iowa City (greater). Even with immigration, it won't be a big boost to rural areas (again away from growing metros. Maybe places like Mid Prairie will see some growth.
I have 6 kids that went to a metro area bedroom school that is quite competitive. 2 engineers, one attorney (at Iowa Law School), 2 in college (1 grad school and one married to an officer teaching at West Point). One of the engineers graduated at a very high ranked mech eng program with honors and couldn't get into high math due to how difficult it was. The only reason he got in was due to where he went to HS based on his class rank.
Granted the wife is from a family of brainiacs, but a lot of the success is due to the Public HS they graduated from. Going to Lone Tree may be good for friends but that ends Also going to a big school allowed them to pick friends groups were at small schools that is more difficult when it comes to alcohol etc.