I find the whole show a little over the top and unbelievable at times, but really funny especially if you've been in the martial arts a while, some of the clever inside jokes are just for us.
But yeah, most of these kids would be locked up in juvenile hall by now and at least a few people would be dead, Miguel in particular. Spoiler alert; he actually goes to Mexico to find his biological dad and breaks up a card game, then beats up some drug dealer thug and they actually let him leave. Yeah, no, he'd be in a vat of acid with a hole in his head.