I agree with most of what you stated.
I personally think that grades can be a hindrance to learning. My last two and a half years of college were spent at
The Evergreen State College. I chose to go there because of it's renowned programs in environmental studies, it's unique approach to teaching, and it was a relatively low cost public school for out of state students. What I was able to learn at that school trumps any other schooling I've ever had.
There are no grades! Students are given assignments as normal, but instead of a quiz, we would have group circles twice a week where we would discuss the reading assignment and sometimes even formally debate certain ideas. Upper level classes had tests per usual, but the scores on the test were mostly superficial. Students earn credits for participation. Of course, if a student never comes to class, or never comes to discussions, or doesn't show up for tests etc. they will get less, or sometimes no, credit for the class.
At the end of the quarter, the student writes an evaluation of the teacher(s) and the teacher writes an evaluation for each student. Students individually sit down with the teacher for a discussion on their strengths and weaknesses in the class as well as to discuss the evaluations.
It's a unique approach to learning and it's certainly not for everyone. Nonetheless, for some people, this system works much better. You might be someone who would benefit from this type of environment, redneckscholar. (Though, Evergreen is not the place to go for IT

)