Hmmm... Why would they go to school then, if they have personal teaching AIs? The point is to interact with the teacher and with each other, not to be all in a classroom and everyone alone (well, with the AI).
With the poor demographics and the example you gave from Japan (which I've seen too), we might have cases where such setups with teaching AIs may be useful, provided there are not enough teachers in certain areas to teach the few children who are in different stages in their learning process and interested in different subjects.
Won't we lose jobs to AIs? We can stay home with the kids. (Half) joking here. 😀 Yeah, you've made some good points, but I still don't see this as one of the best directions where AIs should be used.
I think AI will be everywhere. They'll go in all directions and fields. This may not be high on the priority list though.