This question is motivated by my own experience taking the honors' track of STEM classes during my undergraduate years and the subsequent opportunity for reflection on the role/appropriateness of such classes now that I teach. During my first 4 semesters of college, I was advised to take honors' STEM courses, probably due to my AP test scores. Though each class was taught by a different professor, there were certain common features including accelerated pacing and sequencing that drew upon several different textbooks, and in two courses there was almost no regular homework given. In my math classes, important foundational ideas were simply not presented. (For example, differential equations was taught using only matrix representation, and vector calculus was taught using an upper undergraduate text on differential forms. Simple examples were simply not covered.)
Though I was mostly successful in learning the content as emphasized in the courses, I was also unsettled to realize that I was missing important foundational ideas. It wasn't hard to learn these additional ideas on my own, but in retrospect I have also come to realize that many of my classmates weren't integrating ideas into the big picture because the classes' approach was anti-survey.
I'd estimate that a quarter to a third of the students in these honors courses are successful at integrating the ideas into a big picture. I suspect that the students' ability to integrate the concepts depends more on the students' outside intellectual curiosity to learn things on their own, and much less on the guidance from the professors. And the advanced material of the honors' courses would have been presented as on-level in junior- and senior-level courses anyways.
I now view theses types of courses as an unnecessary academic gamble for most students, as most of the students who were in over their heads would probably have been more successful in the general on-level course. At my school there was a window of time at the beginning of each semester when students could transfer from one course to another, but the really challenging stuff usually wasn't presented until halfway through the courses, at which point it was too late. I don't know if the departments were aiming for a certain number of students in each course, but I never encountered the question of "Are your sure you want to take this course?" that I hope other students were asked.
The problem is how should students' decide if the honors course is appropriate? For the course that I teach, I have more applicants than seats available and I am able to meet with each student before they enroll and discuss the level of rigor, but I don't believe that is the general model. Probably the more universal case is that an honors course has more available seats than applicants, and the faculty need a certain minimum number of students to enroll for the course to run.
