A raft of issues in schools can be illuminated by knowing just what different constituents believe is the real purpose of education--at least formal, in-school education of the sort we know in independent and international schools. Some, parents and teachers alike, see school as a sorting mechanism, much like the hat in the first Harry Potter book, separating the sheep from the goats. Doing well in school, to this way of thinking, means that a student is worthy of the privileges and benefits that accrue to the "successful" among us. Do poorly and, well, someone has to go to community college and tend the plumbing and HVAC systems of the world. This is probably the modal belief in Western culture; e.g., that life is sheep and goats at every turn.
Others think of school as serving a larger sociological purpose; that is, to edify the largest number with a common level of literacy and cultural understanding as a platform from which to participate in civil society. Different learning outcomes are unfortunate, seen in this light, but tolerable so long as a reasonably large number of students "pass" the requisite work.
Still others, including many progressive educators, see the purpose of education as being somehow grander and more individual at the same time: to severe the social purpose, but also to take an individual's learning as far as humanly possible in a lifetime (life-long learning, anyone?). Through this lens, conventional grades are mere indicators of work yet to be done, of mastery still to be attained. Sal Khan echos this point of view when he talks about inverting the relationship between time and mastery in education; e.g., hold mastery constant (at the highest level) and let time vary (students can take as long as necessary to get there).
A week spent doing focus groups with faculty and parents at an international school in Europe drove home the point that all three viewpoints exist side-by-side in every school, and that they require very different sorts of information to be happy customers.