I think the purpose of the quarantines isn't to stop the outbreak completely, but rather to slow it to such an extent that hospitals aren't overwhelmed. It's certainly a fine line to tread, because whilst we obviously don't want economic collapse, we also don't want thousands of people to die who could otherwise have been saved. If we go for herd immunity without any quarantining, then we face the risk of spiralling death rates. The second example on this coronavirus simulator page demonstrates how effective quarantining can be. Probably a slowish, managed herd immunity is the way to go now, through varying degrees of quarantining - in the absence of any quick vaccine, at least. Your argument about introducing the least-at-risk groups to the virus first is, I agree, a sound strategy, although in practice it may be difficult for e.g. parents to deliberately expose their kids.

Arguably the optimal strategy would have been for national governments to start quarantining all people entering the country, as soon as the first cases were announced in China. Unfortunately governments are reactive rather than proactive, which means that a virus with a silent 5-day incubation period can wreak havoc.