I agree this is disturbing, I believe Social Services didn't shut it down because they were told that it was basically a summer camp. I am not sure if the producers will be investigated after the show is out, I had heard rumors about it.
As for things parents do to their kids, one of my friends was sent to a "high school" in Mexico where no one spoke English, they were only allowed to call home twice a year, and they were often locked in cells.
Because she stayed out of the house past curfew, twice. I believe the specific school has been shut down now.