My mother told me that one of the main reasons the public schools never mentioned the deaf school as a placement option was because they were afraid of losing money they get from me. I don't know how valid this is, but if it's true, yikes.
A deaf school should always be considered as an option when discussing placement options in each IEP meeting. Doesn't mean you have to agree to sending the child there, but it should be discussed.
It is VERY ironic that the deaf school, since it is often termed as a residential school, is often considered the more restrictive environment on basis of the interpretation of what is Least Restrictive Environment (LRE). However, since it usually provides direct access to language via a common communication mode, then in that sense, it is actually less restrictive than public schools. For example, which is more restrictive. Direct instruction in which the teacher provides the instruction directly or the use of an interpreter, in which everything that is said is filtered through one person. Of course we should also mention the social opportunities.
Personally, I think it really depends on the child's support system at home. Many kids who succeed in the mainstreamed environment often have parental and family support to guide them. I was very "successful" in public schools (involved with organizations, had friends, 4.0 GPA with almost no modifications), etc. But I ended up going to the deaf school due to lack of social opportunities and direct communication with adults and peers since the public school was not able to provide that. I've experienced both settings.