I have also seen this with my kids in Saudi Arabia, only one of whom emerged from the experience with anything approaching literacy in Arabic. I believe that the problem is not to do with dialect or diglossia but with an educational culture that centers largely on memorization and rote learning. Arabic is approached as content, not as skill, and much of the focus in the classroom is on what teachers do rather than on what students do. Language is not content: it is skill. When we approach language as skill – not content – then we might begin to understand better what appropriate language learning outcomes might be.