That's exactly what I'm saying. The point of essay writing, or doing quadratics or reading about the Civil War isn't about getting a good grade, it's about learning something new, retaining that new information and applying it to future learning. The method of grading and class structures (in that a D-level student starts another year/semester with a clean slate along with all the A-level students from the previous year/semester, despite their obvious deficiencies) is insane when you think about how people actually learn. Grades are a way to motivate through fear of failing, not through interest in a subject. Failure is a natural part of learning and I think people know intuitively when what they're doing isn't working correctly.

But then, I'm a fan of the Montessori method, which focuses far more on process and progress than it does specific outcomes at predefined times. It's hard to translate that method to University, which uses the traditional method of grading. The want of grades has actually caused some Montessori schools to include them superficially to appease parents.