Lester,
I think your characterization is not quite accurate.
Governments don't steal land, they take it by paying fair market value. The land's value is appraised just as it would be in any sale.
The economic argument is that public use of the land is - supposedly - more valuable than private use; so valuable that the government's use outweighs private use.
In this case, a public school is more valuable than a private school.
At least that's the argument.
Fair market value is a fiction.
Let's say I have a use for my land that I value at $400K, where all available alternates are not good locations for my use. Other people might pay $300K for my land, so the assessor has me paid $300K. I'm still out $100K in lost value because now I can't persue my intended use for the land