Standardized testing is the only way that students can be effectively compared to one another. The required ability of students to earn good grades (GPA) differs between schools, and cannot be used fairly to compare students to one another.
While standardized grading might not be the most effective learning method for the student (and conventional schooling and testing is), it is the only effective way to compare students from different schools.
Standardized testing is not a true measure of a student's intelligence, mastery of a subject, or of a teacher or school's competency. We should be teaching more critical thinking skills rather than rote memorization.