"I wonder if this is an attempt at being totally PC or is it that handicapped children are no longer tucked away in the upstairs bedroom? "

That seems to me an example of how people can get hung up on terminology - the implication being that if it's possible to stick a label on something as "PC", that has to mean it can't be sensible, humane and the right way to behave.

Give anything or anybody a label that has the wrong associations, and you're most of the way to being able to write them off. Still true today, and ironically that label "PC" is a case in point. Much better to avoid the term and take the time to explain that what you mean is using language in a way that is sensible and humane, rather than the opposite. (But then my impression is that these days the only people using the term "PC" - setting aside when they are talking about police officers or computers - are using it pejoratively. And frequently aren't too worried about the business of being humane and sensible.)