你最后的理解是正确的。所有的操作词都有替代作用，此时操作词重读（操作词通常是弱读的），替代前文出现过的谓语动词以及该动词所必需的表语、宾语或必具性状语。该句的前一句是这样的：

...however, the conventional view that education should be one of the very highest priorities for promoting rapid economic development in poor countries is wrong. We are fortunate that it is, because building new educational systems there and putting enough people through them to improve economic performance would require two or three generations.

由此可知，it指代前句的the conventional view, is替代前文的 is wrong.