Course letter grades have such terrible problems that I'm always surprised they are allowed to persist. Here's a few…
Using a single scalar like grades (sorry, not even a scalar, an ordinal) or a test score to measure something as complicated as education is an obvious non-starter. Imagine if your car just had a "vehicle health" gauge that went from "0%" to "100%". Or imagine if the only diagnostic on your car was the idiot light.
There's no consensus at all about what grades are supposed to measure. Does an "A" mean "mastered all the material", "learned as much as possible from the course", "did all the required work at maximum level"? Some combination of these? Some fifth thing? In my experience as a student and teacher, different teachers assign grades based on these and other factors (with YAVIS playing a bigger role than anyone wants to admit, as well as huge ethnic and gender biases).
There's no comparability between courses. Is an "A" in Advanced Physics With Calculus the same as an "A" in Basic Money Management? Why or why not? We all know that there are (with all due respect to the former coach and Teacher-of-the-Year who inspired this post) a bunch of classes that are kept in the curriculum so coaches can have teaching jobs, and a bunch of students who take those classes so that they can play sports. What does that do to the value of grades?
Throw the much-vaunted "grade inflation" into the mix and you rapidly come to the conclusion that "four-point student" and "well-educated student" and "knowledgeable, smart student" may have little relation.
My undergraduate alma mater, Reed College, went a long time refusing to give letter grades, choosing instead for a teacher to write a paragraph reviewing each student's performance in the teacher's course. It's the kind of luxury that you have with class sizes in the 15–20 range and amazingly brilliant and well-educated teachers with plausible class loads—not the kind of thing you could get away with in a bottom-dollar school system (public or private) with every kind of skimping except top administrative salaries.
Reed was eventually bullied off its non-grading policy by parents and employers, but they still will only let students look at their grades with the permission of their advisor; if I recall correctly I was refused at least once. Yet somehow Reed maintains its reputation as one of the strongest undergraduate institutions in the US, and I did fine (with mediocre grades) post-college. Huh.
If the colleges were better, if they really had it, you would need to get the police at the gates to keep order in the inrushing multitude. See in college how we thwart the natural love of learning by leaving the natural method of teaching what each wishes to learn, and insisting that you shall learn what you have no taste or capacity for. The college, which should be a place of delightful labor, is made odious and unhealthy, and the young men are tempted to frivolous amusements to rally their jaded spirits. I would have the studies elective. Scholarship is to be created not by compulsion, but by awakening a pure interest in knowledge. The wise instructor accomplishes this by opening to his pupils precisely the attractions the study has for himself. The marking is a system for schools, not for the college; for boys, not for men; and it is an ungracious work to put on a professor.
--Ralph Waldo Emerson
I have always loved that quote, but I disagree a bit with Emerson. I'm not convinced "the marking" is a system for boys or schools, either. (B)