They were not wrong nor insane. They probably had read the study by the conservative Wisconsin Policy Research Institute, another school choice proponent. The study was an effort to prove that the free market system would be the best thing for education. The results were quite a bit less than what they hoped for.
From the November 2007 issue of Milwaukee Magazine, in an article by Bruce Murphy (the article is not on their website yet, but when they do post it, one can find it here):
But Wisconsin's "Free Market Think Tank" as the group labels itself, now thinks the market doesn't work so well in education. Its October report "did not yield the results we had hoped to find," WPRI senior fellow George Lightbourn wrote.
It wasn't true that parents chose schools with the best academic performance. That being the case, the impact of choice will be minimized," Lightbourn admitted to the Milwaukee Journal Sentinel.
Nor was it true that competition from voucher schools was pushing Milwaukee Public Schools to improve. "We may have oversold that point," (Howard) Fuller confessed.