If I wanted to teach myself something, I wouldn't be going to school for it. The whole purpose of grades, testing, and catching cheaters is so a school can determine if a certain person deserves some credentials they give them or not. Ideally we wouldn't need them, but you tell me a better way apart from projects (which have their own problems if they're in groups) to measure a student's proficiency in something while remembering they're taking 5 other classes at the same time with professors who may do the same thing.

I do agree with you on possible bite-backs to a highly test-oriented system, and poorly made tests are very easy to game. Lots of students coast through high school and then around their sophomore or junior year of college stuff starts getting hard and they don't know what to do and don't know how to study.