first - the money doesnt get taken away immediately, they are given several years to get there acts together.
second - each state determines what a good school means as far as test scores. So its not like GWB is up there telling your state what a good school is.
in education there is a saying:
when the horse dies, get off of it
this horse died a long time ago, history has proven that throwing more money at it does not work. History has also shown that reducing class sizes does not work. And the list goes on.
The teachers Union will try to tell you that financial incentives dont work. The truth is that that really has never been studied and tested. The one study that they always quote is riddled with problems. THe most obvious of which was the duration of the study (1 semester). And, I might add, the study was funded by the teachers union.

No conflict of interests there
In the county I live in we have an open enrollment program, which is basically the same as a voucher system only you must choose between public schools only. It forces our public schools to compete against each other for students, and consequently money, since the Fed Gov give money according to attendance. This has worked really well here. We have seen consistent improvement in test scores for the entire duration of the project (abt 4 yrs).
Freedom of choice is always American, voucher's would only increase freedom of choice and the responsibility of the parents. Which is the way it should be.